FILE PHOTO: Hair salon. Photo by Adam Winger on Unsplash
LOGAN – The Logan metro has already been recognized as the best-performing small city in America. Now Logan City, itself, is being recognized as one of the best places in the United States to start a business.
Financial website WalletHub released its latest findings which compared the business-friendliness of more than 1,300 small-sized cities across the country. And Logan City came in ranked 8th overall. The site graded cities on 18 different metrics under three key areas: “Business Environment”, “Access to Resources” and “Business Costs”.
Logan scored particularly well in “Access to Resources” (16th overall) and 5th overall in the subcategory “Most Accessible Financing”. Logan ranked 130th in Business Environment and 146th in Business Costs.
“No one factor dictates what type of business will be more successful in a small city vs. a larger city,” says Robert Sprague, professor of Legal Studies in Business, Department of Management and Marketing, College of Business at the University of Wyoming. “A restaurant can thrive if it provides food customers want at a price appropriate for the area. Retail can be successful, but that depends on offering a product better suited for in-person purchasing vs. online, coupled with outstanding, personalized service.
“With remote affiliations, a tech startup can equally be successful. The key to success in a small city is matching the product/service offered with available infrastructure and support. For example, being significantly dependent on ground transportation in an area that is not close to interstate and/or major highways could be problematic.”
Other Utah communities also scored well in the rankings, with Southern Utah communities taking three of the top four rankings: 1 – Washington (4th in Business Environment and 3rd in Access to Resources), 2 – St. George (1st in Business Environment), and 4 – Cedar City (9th in Business Environment). Five other Utah cities placed in the top 25: 9 – Eagle Mountain, 14 – Lehi, 20 – Pleasant Grove, 21 – Midvale, 25 – American Fork.
According to Sprague, who contributed to the research, entrepreneurs should follow one big piece of advice when starting a new business in a small community.
“Networking: get to know local business people, city administrators, local politicians,” he explains. “Get to be known in the city—that means sponsoring and attending local activities. Become a part of the community. Half the time success will depend more on who you know vs. what you know.”
Sprague also offers advice to local community and government leaders when it comes to fostering new-business growth in their communities.
“(Establish) small business development loans and grants, friendly zoning and ordinances, minimize administrative bureaucracy, (and) maintain infrastructure.”
The study examined the following key data points to create its ranking: Average Length of Work Week (in Hours); Average Commute Time; Average Growth in Number of Small Businesses (which received extra weight in the calculations); Startups per Capita (also received extra weight); Average Revenue per Business; Average Growth of Business Revenues; Industry Variety; Financing Accessibility (this metric was calculated as follows: Total Annual Value of Small-Business Loans / Total Number of Small Businesses); Investor Access; Human-Resource Availability (this metric was calculated by subtracting the “unemployment rate” from the “number of job openings per number of people in labor force”); Higher-Education Assets; Workforce Educational Attainment (this metric measures the percentage of the population aged 25 and older with at least a bachelor’s degree); Working-Age Population Growth (“Working-Age Population” includes those aged 16 to 64); Job Growth (2020 vs. 2016); Business Costs; Office-Space Affordability (this metric measures the per-square-foot cost of commercial office space); Labor Costs (this metric measures the median annual income); Corporate Taxes (data for this metric were available only at the state level); and, Cost of Living.
Data used to create this ranking for WalletHub were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Federal Deposit Insurance Corporation, AreaVibes, Yelp, Indeed, Tax Foundation, LoopNet, and WalletHub’s own research.