Phoenix, Las Vegas, top list of best cities for entrepreneurial growth

Area Development Site and Facility Planning, Jan 2000

HAT ARE THE BEST CITIES IN AMERICA for starting and growing a business? According to Inc. magazine's "Hot Zones" feature, the honor - for the third time in as many years - goes to greater Phoenix, which came in first among large metro areas. Las Vegas ranked number one in the category of small metro areas.

The rankings, which were the result of a study by the economic research firm Cognetics Inc., rated metro areas in two categories: the number of local business starts in the past 10 years that employ at least five people today (as a percentage of all companies), and cities that have the highest percentage of local businesses that were 10 years old or less four years ago and had a growth index of at least three over the past four years. (The growth index is a measure of percentage and absolute job growth.)

Following greater Phoenix in the top-10 ranking of best large cities were Salt Lake City-Provo, Utah; Atlanta; , Raleigh-Durham, N.C.; Indianapolis; Washington, A D.C./Md./Va.; Memphis, Tenn./Ark./ Miss.; Orlando; Dallas-Fort Worth; and Nashville. The top-10 best small metro areas included Las Vegas, Austin, Tex.; Fargo-Moorhead, N.D./Minn.; Savannah, Ga.; Sioux Falls, S.D.; Jacksonville, Fla.; Reno, Nev.; Wilmington-Jacksonville, N.C.; Montgomery, Ala.; and Tucson, Ariz.

David Birch, president of Cognetics and the author of the study, noted, "If you are determined to sacrifice practicality for personal considerations when it comes to choosing a location, then you will probably be forsaking your chances for a certain level of growth. Each kind of business has a different calculus - a different rationale - but there is some logic to choice of place that applies at some point to every growing company. For almost any business, either labor pool, raw materials, or customer location makes a difference. if you are in the oak-flooring business, for example, you had better be near oak trees. Now, you can buck that if you are very small, but eventually it has an important effect on your continued success. So does location matter? Yes, it matters."