RALEIGH – Both Durham and Raleigh rank among the best in the nation when it comes to starting a business, a new report concludes. And Charlotte’s not far behind.
Durham beat out both Raleigh and Charlotte to rank fourth overall in WalletHub’s rankings report of the best large cities in which to start a business.
Raleigh ranked eighth out of the 100 cities included in the analysis. Charlotte finished 13th overall.
Adding more luster to the Triangle as a startup hub: Morrisville ranked 11th in WalletHub’s recent analysis of best small towns and cities for new startups.
However, but both Raleigh and Durham fell in the rankings compared to last year, when Durham finished second overall and Raleigh finished seventh.
One factor for the drops: Shortage of labor.
The lowest ranking received by Durham and by Raleigh in the analysis came in measuring the availability of human capital, as there are an estimated 60,000 open jobs in the region according to the latest WRAL TechWire Jobs Report.
Durham ranked 85th in this metric and Raleigh ranked 89th.
The Triangle also ranked low in another category: the variety and diversity of industry sectors, where Raleigh was 75th and Durham was 85th.
Winston-Salem ranked 22nd, and Greensboro ranked 60th, in the WalletHub analysis.
Morrisville is 11th best small city in US to start a business, report says
Where Durham, Raleigh were strong
Cities were ranked across three dimensions, according to the report’s methodology. Those included the city’s business environment, the access to resources would-be entrepreneurs enjoy, and the costs of starting a business in the given geography. In total, 20 key metrics were included.
Durham ranked highly for the amount of venture capital invested, per capita, finishing sixth overall. Raleigh finished 13th overall in that metric.
Raleigh outranked Durham, though, when it came to an analysis of higher-education assets, finishing fourth in that category while the Bull City finished 13th.
And both Durham and Raleigh ranked similarly, in the top 15, when it came to the share of the population who has earned a college degree. Durham ranked 14th and Raleigh ranked 12th.
Durham also ranked highly for the share of the population that is working age, finishing sixth, and Charlotte finished seventh in that category.
NC is the 19th most innovative state, according to WalletHub analysis
Where Durham, Raleigh lag
Despite the high ranking for Durham and Raleigh when it comes to venture capital investment per capita, both cities lag in another metric: startups per capita. The two Triangle cities tied for 70th on this metric.
Charlotte, however, ranked 39th overall for this metric, and ninth for the growth in the number of small businesses.
Study: Durham ranks No. 2, Raleigh No. 7 as best cities to start a business
Tips for entrepreneurial growth
A professor at NCSU who was cited in the report talked about why urban centers offer entrepreneurs opportunities for a new business. He also offered some advice for startups.
“Big cities are helpful during rough economic times because aspiring entrepreneurs can market to more people and have different avenues for revenue generation,” said Jeff Pollack, Ph.D., a professor at the Poole College of Management at North Carolina State University, who was cited in the WalletHub report.
Pollack recommends testing an idea before launching a startup.
“Most aspiring entrepreneurs feel like they need to have the finished version of the product/service ready before enrolling new customers,” Pollack said in answering the inquiry from WalletHub, published in the report. “For me, the other way around is best. Enroll customers, and then iterate on the idea.”
Entrepreneurs and startups get into trouble when they try to sell to a wide market, said Pollack. “Instead, find a market niche,” he said, answering the WalletHub inquiry. “The most successful businesses start by targeting a specific market niche.”
Pollack believes that the next big sector where startups can disrupt the status quo will come in education, due to the challenges exposed by the pandemic.
Whatever the future holds for startups and entrepreneurs, Pollack noted that there is an important role that the public sector and the private sector might be able to provide or incentivize.
In responding to a question about what cities and states can do to boost entrepreneurship, Pollack noted five support structures where support could assist in boosting entrepreneurial success:
- Safe and inexpensive child care.
- Low rent housing.
- Free access to co-working spaces.
- Discounts on the cell phone and internet plans.
- Introductions (via mentor events) to influencers.
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