Hot cities

Entrepreneur, Oct, 1998

* overall ranking

Top 5 Central Cities

1. Indianapolis, IN (6(*)) 2. San Antonio, TX (9) 3. Austin/San Marcos, TX (14) 4. Fort Worth/Arlington, TX (15) 5. Dallas, TX (19)

* overall ranking

Best Bets for lowest relative costs

1. San Antonio, TX (9(*)) 2. Oklahoma City, OK (36) 2. Fort Worth/Arlington, TX (15) 4. New Orleans, LA (24) 5. Houston, TX (20) 5. Memphis, TN/AR/MS (11) 5. Salt Lake City/Ogden, UT (10) 5. Indianapolis, IN (6)

* overall ranking

Top 4 Mountain Cities

1. Salt Lake City/Ogden, UT (10(*)) 2. Phoenix/Mesa, AZ (16) 3. Las Vegas, NV/AZ (18) 4. Denver, CO (33)

* overall ranking

Best Bets for economic growth

1. New York, NY (41(*)) 2. Las Vegas, NV/AZ (18) 3. Phoenix/Mesa, AZ (16) 4. San Jose, CA (31) 5. Orlando, FL (3) 5. Raleigh/Durham/Chapel Hill, NC (1)

* overall ranking

Best Bets Cities with the lowest failure rates

1. New Orleans, LA (24(*)) 2. Greensboro/Winston-Salem/High Point, NC (7) 3. Washington, DC/MD/VA/WV (32) 4. Fort Lauderdale, FL (12) 5. Raleigh/Durham/Chapel Hill, NC (1)

* overall ranking

RELATED ARTICLE: BY THE NUMBERS

OK, so you've gotten a taste of this year's ranking. Now, undoubtedly, you're poised on the edge of your seat, awaiting explanation as to how we determined which spots are the hottest for entrepreneurship.

There are five basic categories we assess: entrepreneurial activity, small-business growth, economic growth, risk (cities with the lowest business failure rates) and relative costs of doing business. But we made some important changes for the 1998 ranking. "This year, we made the [list] more truly focused on small business," says Hess. To do this, we factored in the number of businesses within MSAs that were 5 years old or less and measured employment growth among small firms (for this ranking, defined as those with fewer than 20 employees).

In previous years, we gave more weight in the overall ranking to corporate tax rates and the cost of living. This year, these two factors, in addition to the average wage, were combined into an overall relative-cost rating. Naturally, though, the process is not nearly as interesting as the picture of entrepreneurship it produces. Over the next 10 pages, we'll point you in the direction of small business's happening places, region by region.

RELATED ARTICLE: ABOUT DUN & BRADSTREET

Dun & Bradstreet (D&B), with the world's largest business information database, tracks 49 million companies worldwide, 11 million in the United States alone. Businesses use D&B's services to find new customers and evaluate their creditworthiness, identify potential suppliers, and collect overdue receivables.

Through face-to-face and telephone interviews and public-records searches, more than 200 million financial transactions are added annually to D&B's files in the United States alone. D&B updates its information base continually-more than 750,000 times each business day.

When businesses are entered into the D&B database, they are issued D-U-N-S numbers (similar to Social Security numbers for companies). The U.S. federal government requires companies to have this number to bid for government contracts. Also used by the United Nations and the European Union, the D&B D-U-N-S number is quickly becoming the universal standard for identifying businesses on the World Wide Web as well.