What Are the Best US Cities To Start a Small Business In?

There are over 34 million small businesses in the United States, with new ones popping up every day. But, some cities are home to more small businesses and entrepreneurial spirit than others.

GoDaddy’s report ranked these as the top US cities for small businesses:

1. San Francisco, CA
2. Los Angeles, CA
3. Denver, CO
4. Oklahoma City, OK
5. Frankfort, IL
6. Ontario, CA
7. Wilmington, DE
8. Wilmington, NC
9. Katy, TX
10. Alameda, CA

So, what are the key takeaways from GoDaddy’s report on the most entrepreneurial cities in the US? California is represented four times – that’s a combined total of 342,824 new small businesses in the last year, split across San Francisco, Los Angeles, Ontario, and Alameda.

San Francisco alone saw an impressive 122% growth year-on year, with small businesses overcoming incredible hurdles, including high costs and, lately, the US tariffs increasing. San Francisco wouldn’t have made the cut in 2024, meaning the city has seen a real boom in recent months. GoDaddy reports this is likely because of the city’s “deep-rooted tech culture, access to venture capital and highly skilled workforce.”

The other important finding from this report is that smaller cities are seeing a rise in new businesses. For example, Frankfort, IL, has an estimated population of 20,296. With 10,370 new businesses popping up in Frankfort over the last year, that means half of the city is now running a small business.

The entrepreneurial spirit evident in these smaller, suburban hubs highlights the growing number of businesses across the US, and not just in large cities. However, it’s worth noting that these smaller cities are usually in close proximity to bigger ecommerce hubs, like LA or Chicago. For example:

• Frankfort saw 16% growth YoY – close to Chicago
• Ontario saw 100% growth YoY – close to LA
• Katy saw 12% growth YoY – close to Houston
• Alameda saw 83% growth YoY – close to San Francisco and Oakland

In February 2025, website builder Hostinger released a similar report, focusing on the best US cities for freelancers. Miami came out on top, but there are a lot of crossovers in the data. Most notably, San Francisco, LA, and Denver all feature on this list as well, making them ideal locations for freelancers and small businesses.

➡️ Learn which states have the highest sales tax rates before you decide where to start a business.

So, if you’re thinking about starting a small business of your own, consider one of these top 10 entrepreneurial cities in the US. California is a clear frontrunner, offering great networking opportunities and an established community of small businesses.

But, if you don’t want to move to a big city, smaller cities are home to a growing ecommerce spirit as well. And, starting a business outside one of these cities doesn’t mean you’ll fail – what matters is that you try. If your city didn’t make the final cut, what’s it like for small businesses?