What are the best cities in order to start a business?

Money magazine has come out with their latest list of the 100 best cities to start a small business. Money magazine looks at taxes, business environment, and recreation opportunities in the area to determine the winners.

Apparently, they do not look at affordability or how easy it is for a small business to enter the marketplace when it compiles the list. Just look at their number one pick Bellevue. While Bellevue is in a beautiful location just east of Seattle, the person trying to start a small business would be hard press to afford the area. Housing is expensive and retail rents even more so. The area is filled with chains and from my experience actual small business enterprises are few and far between.

Also, they seem to be missing something on the tax front. Yes, you can benefit in Washington because the state does not have any income tax, however as a business owner you get it in the shorts. Washington has what is the called the B&O tax (Business and Occupation), which taxes you not on your net income but on your gross receipts. You made 200,000 in revenue but after expenses lost $100,000? Too bad you are taxed on the $200,000 you took in.

The first place I see that I consider affordable is Denver, Colorado.

So while Money's list has some good information in it, the usefulness of real small business owners may be questionable. I have lived in many cities across the country and that has taught me that no matter where you live there are pluses and minuses. What it all comes down to is finding a place that you like to live and sticking with it. There is no use moving to someplace that you don't like just because it may be easier to start a business.

Thanks to Biz Chicks Rule for referring to this article.