Top 5 Cities for Starting Online Businesses

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Places like Silicon Valley and Silicon Alley likely ring a bell for being a hotbed of places to launch the next great business venture. But you don’t have to have real estate in these two cities, especially now that the Internet has helped make things a new ball game for entrepreneurs.

We’ve found five of the best cities to start up an online business. These areas are making a name for themselves and we want to make sure you know about them.

1.       Kansas City, MO

Kansas City is preparing for big changes in innovation with the onset of Google Fiber. The city is one of just a handful throughout the U.S. which will receive free, gigabit Internet. In addition to Google Fiber, the Mayor has announced a city-sponsored initiative called Launch KC. The idea behind Launch KC is to attract more startups with enticements such as equipment subsidies and cheaper office space. The initiative allows businesses to access a large data center for more computing power and connects business owners with others who want to network.  Larger local companies, like Hallmark Cards, are also donating office space to new entrepreneurs.

2.       Atlanta, GA

Atlanta is an educated city with more than 46% of residents having received a Bachelor’s degree. Georgia Tech is nearby, providing good talent for growing businesses and the city itself is known as a tech hub. In addition, Atlanta’s cost of living is low, 1.6 percent below the national average, making the city attractive to start ups. The Metro Atlanta Chamber also offers small business support with resources for entrepreneurs, networking luncheons, monthly workshops, and CEO Roundtables. You’ll also find training resources and free consulting at the University of Georgia’s Small Business Development Center Network.

3.       Austin, TX

If you want to live in the “Live Music Capital of the World” and hob-nob with musicians, artists, and writers at the South by Southwest festival then Austin is the place to start your business. In addition to the vibrant music scene, Austin is also gaining in small business growth. From 2007 to 2008 small businesses grew by 1.5 percent. The cost of living is below the national average in Austin and the University of Texas nearby offers an educated workforce. Texas has no corporate income or personal income tax. There is a state business franchise tax that range from .5 to 1.0 percent. You are exempt from this tax if your business revenues are under $300,000. The rest of the state and local taxes are below the national average, making the city attractive to new business.

4.       Charlotte, NC

Charlotte’s population is growing, having an 18.6 percent population growth from 2007 to 2011. The increase of people contributes to the thriving small business environment in the city. The Business Innovation and Growth Council is working to create an environment that encourages high-impact and growing entrepreneurs. Many startups can qualify for matching fund grants or you can receive assistance and professional counseling at the Institute for Entrepreneurship. In addition, North Carolina offers one of the nation’s lowest effective business taxes, low workers’ compensation and unemployment expenses, tax credits, funds, and grants.

5.       New York City, NY

You may not consider New York City as a place to start your business because of the high cost of living. The city is expensive, but the metro New York area has 27.73 small businesses per 1,000 residents. The size of the city itself encourages innovation. The city has many resources for startups including the New York Public Library and the Citi Foundation, who both combine their forces to sponsor a startup business plan competition that has prizes worth more than $30,000. Recently, New York City Mayor Michael Bloomberg has also pushed initiatives that will help grow the city’s entrepreneurial power. He has put together a mix of venture-capital incentives, higher-education initiatives, and policies friendly to technology companies. The Center for Urban Future reports from 2007 to 20011, more than 1,000 web-based tech startups were in the city, with more than 80 raising at least $10 million worth of investments. Companies like ZocDoc, Tumblr, and Warby Parker are among the startups calling NYC home.

If you’re looking to start an online business and want a tech-friendly city, consider one of these five as your new home.

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Ryann Rasmussen is fascinated by the Internet of Things and the impact our hyperconnected world has on modern society. She also enjoys running, reading, anything to do with music, and sharing Web goodies with the masses.

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