Note: The following article was written for and originally posted on Forbes.com.
Where do you think the majority of today’s hottest businesses are setting up shop? Is your answer Silicon Valley or maybe New York City? Surely you’re thinking to yourself that San Francisco must lead the startup scene.
If so, you’re wrong. The traditional startup epicenter is shifting away from these mega metropolitan areas and this shift means greater opportunities for businesses.
Data-visualization site HowMuch.Net used census data to illustrate cities with the highest concentrations of startup jobs as a percentage of total jobs. When it comes down to it, Silicon Valley cities don’t even break the top 100 cities.
According to the data, the top three locations (which you likely aren’t familiar with) for startups include:
- Midland, Texas (population 123,933)
- Greenville, North Carolina (population 89,120)
- Madera-Chowchilla, California (population 17,383)
Why small towns? Small Business Trends reports that the mantra remains “location, location, location.” High taxes and strict regulations in mega metros traditionally associated with startups often hinder growth. In fact, these businesses tend to perform best in small towns.
“If you’re a savvy entrepreneur, you may have a lot to offer,” Jayson DeMers wrote for Small Business Trends. “Small town business owners can often benefit from the insights you may be able to provide, which also creates small town business opportunities for professional consulting services or training that can help them advance their own careers.”
The Small-Town Advantage For Businesses
There are numerous reasons to consider starting your business in a small town. However, here are my top seven advantages that may sway your decision:
- Cost of employees. Getting away from the big cities dramatically lowers the cost of living. The median sale price for a home in Silicon Valley now surpasses $1 million. To compare, the median sale price of a home in Midland was less than $200,000 and $145,000 in Greenville. With a lower cost of living, you will be able to afford the area’s top talent without breaking the bank.
- Recruiting made simple. To start, seek out new hires at local job fairs and colleges. You’ll build a “buzz” among these communities and talent will seek you out. As a relatively new business, we are just starting to expand our team. We have been able to take advantage of local opportunities, such as a team of graduate students from a local university who worked at Lucky Orange as part of their capstone project.
- Less competition. Simply put, it’s easy to become an industry expert in a smaller town. With few (if any) similar businesses to turn to, you can become the community’s expert. People may even approach you outside of businesses hours for advice.
- Budget-friendly office space. It always comes down to the almighty budget, and in smaller towns, it costs less to rent an office space, even as your business expands. This contrasts with higher office space costs in larger cities that can force businesses to keep changing locations to stay on budget. Initially, Lucky Orange had a staff of two and sought out an affordable co-working space. When the time came to move to a large, dedicated office, we secured a location for less than $9 per square foot.
- Easier networking. Residents in small towns have an immense amount of community pride and have an unwavering loyalty to local businesses. As the local company, people in the area are likely to provide a warm introduction for you. Our experience was no exception. We were quickly recognized by a local business publication and continue to be provided opportunities to speak with industry groups throughout the area. The more opportunities we have to speak and participate in conferences, the more people know who we are.
- Personalized service. Let’s be honest – people have complicated relationships with national chains that can’t (or won’t) offer the personalized services their customers would prefer. Cue smaller businesses that can actually provide these services. Smaller communities tend to appreciate personalized services more than their big city cousins.
- Accessible market. From an advertising and marketing standpoint, small towns are the proverbial gold mine. Efforts are normally cost-effective, and targeting a smaller area makes it easier to get more bang for your buck. And don’t underestimate the value of word-of-mouth marketing. A word of caution, though – news travels fast in small towns, whether good or bad. For Lucky Orange, word-of-mouth marketing was our initial method of gaining new customers, and it worked flawlessly. Without this simple, small town marketing, we would have struggled to become the thriving business we are today.
Our Experience In A Small Town
As a co-founder, setting the Lucky Orange cornerstone in Overland Park, Kansas, (population 181,260) was a no-brainer. Overland Park is a growing suburb of Kansas City, Missouri, and thrives in maintaining its small-town vibe.
Now, the “what if” questions remain: Had we launched in Silicon Valley, would we have been able to afford an office space large enough to accommodate our staff? Would we have had the same opportunities available to us that we have here? Could we have amassed our first 6,000 users – major corporations included – using just word-of-mouth marketing in New York City?
Hindsight is always 20/20, so it’s hard to really know these answers. What I do know is these humble beginnings based in a relatively small city helped make our company exactly what it is today. In the end, the town that your company calls home isn’t just a place. It’s the foundation for your company’s future.