30 hottest cities for new businesses

Some cities — like San Francisco — are synonymous with startups. But there are plenty of other places across the U.S. where entrepreneurs are thriving thanks to an abundance of resources and, in some cases, even funding to help new businesses grow.

To pinpoint those places, GOBankingRates used data from the Kaufman Index on the rate of new entrepreneurs and the density of startups. Rate of new entrepreneurs refers to the number of adults out of every 100,000 who have become entrepreneurs in any given month. Startup density measures the number of new firms per every 1,000 companies. Move to these cities when you know you're ready to start your own business. We scored both of these variables to determine which cities have the greatest startup activity.

Keep reading to see the best cities to start a business.

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The hottest US metros for new businesses
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The hottest US metros for new businesses

30. Cleveland

  • Rate of new entrepreneurs: 0.19%
  • Startup density: 54.3

In Ohio's second-largest city, 0.19 percent of the adult population — or 190 of every 100,000 adults — become entrepreneurs in any given month. Ohio had one of the most-improved economies in 2017.

Cleveland actively recruits and helps fund startups through Flashstarts, a startup accelerator and micro-venture fund. There also are a variety of other organizations that support entrepreneurship in the area, including the Great Lakes Innovation & Development Enterprise that provides startup funding through its Innovation Fund. 

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29. Jacksonville, Fla.

  • Rate of new entrepreneurs: 0.11%
  • Startup density: 89.4

Florida's largest city has a lower rate of entrepreneurs than Cleveland — 110 out of every 100,000 adults starts a business in any given month. But it ranks higher because it has a higher startup density, meaning that there are more new businesses per every 1,000 companies.

Florida has no corporate franchise tax or taxes on inventories, and there are tax incentives for businesses that relocate or expand in Northeast Florida, where Jacksonville is. Plus, another GOBankingRates study found that Jacksonville is one of the most tax-friendly major cities — which might explain why it attracts startups. 

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28. Cincinnati

  • Rate of new entrepreneurs: 0.30%
  • Startup density: 61.6

In Cincinnati, 300 out of every 100,000 adults starts a business in any given month. And out of every 1,000 firms, nearly 62 are new businesses. Cincinnati has several startup accelerator programs and incubators — such as The Brandery, Founder Institute and Minority Business Accelerator — which provide funding and support for entrepreneurs.

Learn the startups to watch in 2018 — and start working to get your business idea on the list for next year. 

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27. Chicago

  • Rate of new entrepreneurs: 0.22%
  • Startup density: 74.7

America's third-largest city has become a hotbed for startups thanks, in large part, to Illinois universities that are producing a considerable number of science, technology and business graduates who pursue entrepreneurship, Forbes reported. Chicago also has several startup accelerators and entrepreneurship center 1871 that provides co-working space, seminars and educational programming. Another GOBankingRates study found Chicago has the second-most job openings in the country

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26. Columbus, Ohio

  • Rate of new entrepreneurs: 0.28%
  • Startup density: 66.2

Ohio's capital and largest city is one of the fastest-growing startup economies in the U.S., according to VentureOhio. Support from corporate, community and private-sector organizations has helped fuel this growth. In particular, startup accelerator Rev1 has fostered new businesses in Columbus through funding and other resources. 

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25. Detroit

  • Rate of new entrepreneurs: 0.25%
  • Startup density: 71

Although Detroit is the largest city to file for bankruptcy, it's reinventing itself as an "All-American Comeback City." As Detroit has bounced back, entrepreneurship has flourished. There has been a 50 percent increase in the number of startups in the city within the last three years, according to Michigan Venture Capital Association. The Detroit Economic Growth Corporation provides resources for startups, as do organizations such as Grow Detroit.

One benefit of starting a new business in Detroit: It costs very little to live comfortably there

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24. Boston

  • Rate of new entrepreneurs: 0.33%
  • Startup density: 68.2

In Boston, 330 out of every 100,000 adults start a new business in any given month. The city has several startup accelerators — such as MassChallenge — that provide resources and funding to help entrepreneurs launch and grow businesses. 

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23. Portland, Ore.

  • Rate of new entrepreneurs: 0.26%
  • Startup density: 82.8

Portland's startup scene has been thriving thanks to the availability of venture capital through groups such as Portland Seed Fund. Plus, area schools, like Portland Community College, have programs that foster entrepreneurship, Inc. reported. Out of every 100,000 adults in Portland, 260 start a new business in any given month. 

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22. Nashville, Tenn.

  • Rate of new entrepreneurs: 0.27%
  • Startup density: 82.2

Nashville is known as Music City, but it also has become a hub for entrepreneurs. Out of every 100,000 adults, 270 start a new business in any given month. Seed funds, such as Jumpstart Foundry, and partnerships, such as the Nashville Entrepreneur Center, are helping entrepreneurs launch and grow their businesses. 

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21. San Jose, Calif.

  • Rate of new entrepreneurs: 0.26%
  • Startup density: 86.9

It's probably no surprise that this city in California's Silicon Valley has lots of entrepreneurs. This hub for technology companies has several resources that help people turn their business ideas into reality — such as the Founders Floor, a co-working space and accelerator program for tech startups. 

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20. Sacramento, Calif.

  • Rate of new entrepreneurs: 0.31%
  • Startup density: 81

The capital of California actually has a higher rate of new entrepreneurs than San Jose. Out of every 100,000 adults in Sacramento, 310 start a new business in any given month. The city has actively been trying to lure entrepreneurs who are trying to escape the high cost of living in San Francisco and San Jose, the Los Angeles Times reported. And groups such as StartupSac have been helping foster startups in the city. 

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19. St. Louis

  • Rate of new entrepreneurs: 0.23%
  • Startup density: 96.7

St. Louis has one of the highest startup densities on our list. Nearly 97 out of every 1,000 companies is a new business. The city's fast-growing startup scene has been helped by venture funds, state and local partnerships, and co-working spaces and incubators, Inc. reported. Plus, the low cost of living in St. Louis might be appealing to entrepreneurs. 

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18. Kansas City, Mo.

  • Rate of new entrepreneurs: 0.37%
  • Startup density: 83.6

In Missouri's largest city, 370 out of every 100,000 adults start a new business in any given month. Entrepreneurs in Kansas City get help starting their businesses with support from groups such as Kansas City Startup Village and LaunchKC. Plus, Missouri is one of best states to start a business because of its high business survival rate, another GOBankingRates study found. 

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17. Tampa, Fla.

  • Rate of new entrepreneurs: 0.34%
  • Startup density: 89

This city on Florida's Gulf Coast has a higher startup density than half of the cities on our list. Startup accelerator programs, such as Tampa Bay Wave, help fund and support new businesses in the city. Plus, the University of Tampa has an entrepreneurship center that helps prepare students to become entrepreneurs. 

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16. San Francisco

  • Rate of new entrepreneurs: 0.37%
  • Startup density: 86.5

San Francisco is a hotbed for entrepreneurship and is known for startups such as Airbnb, Uber, Twitter and Pinterest. In this Bay Area city, 370 out of every 100,000 adults start a new business in any given month. And nearly 87 out of every 1,000 companies is a new business.

Find Out: Which Startup Is Your State Known For? 

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15. Charlotte, N.C.

  • Rate of new entrepreneurs: 0.37%
  • Startup density: 87.5

North Carolina's largest city actually has a higher startup density than San Francisco. Entrepreneurship in Charlotte is flourishing thanks to several co-working spaces, funding from groups such as Charlotte Angel Fund and organizations, such as StartCharlotte, that serve as a one-stop shop for startup information. 

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14. Orlando, Fla.

  • Rate of new entrepreneurs: 0.25%
  • Startup density: 105.5

Although the rate of new entrepreneurs is lower in Orlando than several other cities that rank lower on our list, it has the third-highest startup density. Nearly 106 out of every 1,000 companies is a business less than one year old. Accelerator programs, such as Starter Studio, and funding from venture capital groups, such as FireSpring Fund, have contributed to the growth of startups in the city, the Orlando Business Journal reported. 

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13. San Antonio

  • Rate of new entrepreneurs: 0.38%
  • Startup density: 87.2

In the second-largest city in Texas, 380 out of every 100,000 adults starts a new business in any given month. Startups can take advantage of co-working spaces such as Geekdom, which also provides funding for entrepreneurs. And groups such as Launch SA provide workshops, support and resources for startups. 

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12. Riverside, Calif.

  • Rate of new entrepreneurs: 0.36%
  • Startup density: 92.4

This city in California's Inland Empire has a higher startup density than more than half of the other cities on our list. Entrepreneurship in Riverside gets a boost from ExCITE, a partnership between the University of California Riverside, city and county of Riverside and private industries. This startup accelerator helps new technology businesses through funding, professional resources and access to lab space and specialized equipment. 

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11. New York

  • Rate of new entrepreneurs: 0.41%
  • Startup density: 86.5

The biggest city in the U.S. has one of the highest rates of new entrepreneurs. In New York, 410 out of every 100,000 adults starts a business in any given month. The city has plenty of startup accelerators that help entrepreneurs get their businesses off the ground. And the New York City Economic Development Corporation offers lots of programs for entrepreneurs.

Find Out: What It's Really Like to Be an Entrepreneur 

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10. Phoenix

  • Rate of new entrepreneurs: 0.38%
  • Startup density: 92.1

In Arizona's capital and largest city, 380 out of every 100,000 adults starts a new business in any given month. The low cost of living in Phoenix has helped lure entrepreneurs to this desert city, according to the U.S. Chamber of Commerce's Free Enterprise newsletter. The Greater Phoenix Economic Council and Arizona Commerce Authority also have encouraged entrepreneurship in the city. 

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9. Dallas

  • Rate of new entrepreneurs: 0.37%
  • Startup density: 94.2

Dallas has a fast-growing startup scene, according to the Dallas Morning News. Organizations such as The Dallas Entrepreneur Center have provided co-working space and support for entrepreneurs. And startup accelerators, such as Tech Wildcatters, provide funding for promising new businesses. 

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8. Denver

  • Rate of new entrepreneurs: 0.39%
  • Startup density: 92.3

In Colorado's capital and largest city, 390 out of every 100,000 adults starts a new business in any given month. According to Fox Business, Denver has become a hub for entrepreneurs with the help of events such as Denver Startup Week and The Commons on Champa, a co-working space that also offers programs and resources for entrepreneurs. 

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7. Houston

  • Rate of new entrepreneurs: 0.4%
  • Startup density: 92.6

The largest city in Texas is actively trying to increase its number of startups to diversify its economy, the Houston Chronicle reported. Station Houston has been playing a big role in helping encourage entrepreneurship in Houston. Launched in 2016, this startup accelerator offers a co-working space, mentorship, resources and funding for entrepreneurs. 

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6. Atlanta

  • Rate of new entrepreneurs: 0.43%
  • Startup density: 89.9

Atlanta has the fifth-highest rate of new entrepreneurs among the cities on our list, with 430 out of every 100,000 adults starting a new business in any given month. The city has fostered entrepreneurship through startup incubators, support networks and resources such as the Advanced Technology Development Center, according to Forbes. 

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5. San Diego

  • Rate of new entrepreneurs: 0.49%
  • Startup density: 92.3

San Diego tops the state's better-known entrepreneurial hot spots — San Francisco and San Jose — for its rate of new entrepreneurs. Out of every 100,000 adults here, 490 start a new business in any given month. In fact, San Diego has been luring startups away from Silicon Valley, Mashable reported. Organizations such as StartUp San Diego and venture capital groups such as Seed San Diego are helping promote entrepreneurship in the city. 

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4. Los Angeles

  • Rate of new entrepreneurs: 0.56%
  • Startup density: 92.3

Along with Miami, Los Angeles has the highest rates of new entrepreneurs. In fact, the Los Angeles area has been dubbed Silicon Beach because of its large number of tech startups. But it doesn't rank higher on the list because its startup density is lower than in several other cities. 

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3. Austin, Texas

  • Rate of new entrepreneurs: 0.51%
  • Startup density: 104.5

Austin has the third-highest rate of new entrepreneurs and the fourth-highest startup density. The capital of Texas has seen its startup scene grow thanks to talent coming from the University of Texas and an increase in venture capital funding, Crunchbase reported. Another benefit of living and working in the city: Austin is one of the best cities for millennial homebuyers

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2. Las Vegas

  • Rate of new entrepreneurs: 0.42%
  • Startup density: 120.7

Las Vegas has the highest startup density of any city on our list. Nearly 121 out of every 1,000 companies is a new business. To lure startups, Zappos CEO Tony Hsieh invested $350 million in 2012 into the Downtown Project, which still works to spur business growth in Las Vegas. 

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1. Miami

  • Rate of new entrepreneurs: 0.56%
  • Startup density: 107.8

Miami, along with Los Angeles, has the highest rate of new entrepreneurs. Because its startup density is higher, it lands in the No. 1 spot among the best cities to start a business. South Florida universities are helping fuel new business growth with entrepreneurship programs, the Miami Herald reported. Plus, organizations such as Endeavor Miami are helping startups grow, and angel investor groups such as Miami Angels are funding entrepreneurs.

Click through to learn some of the least expensive franchises you can buy.

Methodology: GBR identified the top 30 U.S. Cities with the highest startup activity using data from the Kaufman Index. Two factors were used:rate of new entrepreneurs and startup density. Rate of new entrepreneurs measures the number of adults out of every 100,000 adults who became an entrepreneur in a given month and divides those two numbers to determine the rate of new entrepreneurs. Startup density measures the number of startup firms per a 1,000 firm population. Startup businesses are defined as firms less than one year old employing at least one person besides the owner. Both of these variables are scored, with the lower number indicating greater startup activity and the higher number indicating less startup activity. Once these two variables are scored, they are added together to create a final ranking to determine which states have the greatest startup activity. 

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This article originally appeared on GOBankingRates.com: 30 Hottest Cities for New Businesses

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