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New small businesses have a tough time in these 10 cities, report says

New small businesses have a tough time in these 10 cities, report says
[Photo: Tim Mossholder/Unsplash]

If you want to start a small business, you might want to skip Cincinnati. A new study from LendingTree looked at data from small-business owners around the country to determine where small businesses thrive and where they fail, and Cincinnati tops the list of the “worst cities” for new small businesses.

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LendingTree took a deep dive into the issue by looking at data from 80,000-plus new small-business owners who sought capital through its small-business loan marketplace.

Specifically, it looked at businesses that earn an annual revenue of less than $7,500,000, have been in business for at least six months and no longer than 60 months, and submitted a loan query to LendingTree between Jan. 1, 2016, and Jan. 23, 2018. The self-reported data was then limited to the 50 most populous metropolitan areas, and with that, a list was born. While this certainly isn’t definitive, it could be something good to consider if you’re launching a new enterprise somewhere in the United States.

Topping the list of places that are hard on small businesses was Cincinnati, where startups had an average annual revenue of just $198,516 and only about 79.8% of businesses reported they were profitable.

Here are the 10 worst cities, per LendingTree:

  1. Cincinnati
  2. Rochester, N.Y.
  3. Philadelphia
  4. Louisville, Ky.
  5. Birmingham, Ala.
  6. Detroit
  7. Harrisburg, Pa.
  8. New Orleans
  9. Virginia Beach, Va.
  10. Chicago

Now that you’ve scrapped plans to open your artisanal eraser business in Rochester, consider Sacramento, where “startups thrive” with an average annual revenue of $315,661, and where 84.3% of rising small businesses were profitable.

Here are the 10 best cities, per LendingTree:

  1. Sacramento, Calif.
  2. Grand Rapids, Mich.
  3. Portland, Ore.
  4. Knoxville, Tenn.
  5. Denver
  6. Seattle
  7. Tulsa, Okla.
  8. Albuquerque, N.M.
  9. Fresno, Calif.
  10. Los Angeles
  11. Oklahoma City
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