I like things that are easy. When I find a study saying the way I sleep, the amount of coffee I drink, or the things I do for fun are actually good for me, I latch onto it.
The same instinct applies in business. So when WalletHub announced that it had studied more than 1,300 small cities across the United States to figure out which ones were the best and worst places to start a business, I pored over the numbers, and I think I found a cheat code hiding in plain sight.
Short version: Go where the people are.
First, the list
WalletHub ranked cities with populations between 25,000 and 100,000 by 18 metrics — everything from the growth rate of small businesses to investor access, labor costs, office space affordability, and commute times.
Here are the top 10:
St. George, Utah
Fort Myers, Florida
Washington City, Utah
Bozeman, Montana
Greenville, South Carolina
Cedar City, Utah
Boca Raton, Florida
Cheyenne, Wyoming
Ocala, Florida
Dover, Delaware
A pattern emerges
Once you get past the top section, a pattern emerges that’s hard to ignore.
Florida and Utah cities just keep showing up:
South Bradenton, Florida (No. 11); Lake Worth Beach, Florida (12); Midvale, Utah (14); Palm Beach Gardens, Florida (15); Horizon West, Florida (16); East Lake-Orient Park, Florida (17); Springville, Utah (19); Herriman, Utah (21); Winter Park, Florida (22).
Nine of the next 12 spots belong to either Florida or Utah.
OK, but why?
The short explanation: Both of these states have seen exceptional population growth in recent years. Florida added 467,000 residents in a single year, from 2023 to 2024.
Utah tied Texas for third-fastest-growing state in 2024 at a 1.8 percent growth rate, and it has grown from 2.76 million residents in 2010 to more than 3.5 million today. Over the past 15 years, both states have added residents at roughly three times the national median rate.
Interestingly, they’re growing for different reasons.
Florida’s growth is largely migration-driven: retirees, remote workers, post-pandemic movers looking for lower taxes and warmer winters. That influx tends to bring capital and consumers.
Utah’s story is different. The state has the highest per-capita rate of natural increase — meaning births over deaths — of any state in the country. Its growth is younger, more organic, and more distributed across smaller cities rather than concentrated in one or two dominant metros.
Why not Texas? Why not Nevada?
Two other fast-growing states are conspicuously absent from the top of the list: Texas and Nevada. So why don’t they show up here?
The answer is that this was a study of small cities, and while both states have seen enormous population growth, it’s overwhelmingly concentrated in their large metros.
More than 90 percent of Texas residents live in metropolitan counties, and over 95 percent of the state’s population growth from 2020 to 2023 occurred in just 26 metropolitan statistical areas — Houston, Dallas, Austin, San Antonio, etc.
Those cities are too large to qualify for this study, and the smaller Texas cities simply aren’t riding the same wave.
Nevada is an even more extreme case. Clark County — home to Las Vegas — accounts for more than two-thirds of the entire state’s population, and 92 percent of all Nevadans live in urban areas.
Utah’s growth, by contrast, is more distributed. The St. George and Washington City corridor in the state’s southwest isn’t a spillover from Salt Lake City — it’s its own genuine small-city growth story.
Not just about where
Plenty of companies serve national or global markets regardless of where they’re headquartered. However, if you can identify a business whose natural market is a growing population segment, you’ve found the same tailwind in a different form.
A few examples worth thinking about:
Adults older than 65: The U.S. Census Bureau projects this group will outnumber children under 18 for the first time in American history by 2034.
Pet owners: The American Pet Products Association estimates Americans spent over $150 billion on their pets in 2023, a number that has essentially doubled in a decade.
Remote and hybrid workers: The share of Americans working from home at least part-time has stabilized at roughly three to four times its pre-pandemic level.
The geographic cheat code and the demographic cheat code work the same way: You’re not fighting the current. You’re letting it carry you.
Why make it difficult?
WalletHub’s full methodology weights business environment, access to resources, and cost of doing business.
But, I keep coming back to the simple version. Business is hard, and starting a business is harder.
There are a hundred things working against you that you can’t control — the economy, timing, competition, and luck.
Population growth is a tailwind: more potential customers, a deeper talent pool, and a market that’s expanding rather than contracting. It won’t save a bad business, but all other things being equal, it improves your odds.
Now, let me tell you a little bit about coffee …
Other things worth knowing …
Reuters: The U.S. Supreme Court gutted the Voting Rights Act in a 6 to 3 decision Wednesday, making it harder for minorities to challenge electoral maps as racially discriminatory under the landmark civil rights law. “I love it,” President Trump told reporters after hearing of the decision.
Politico, Clarion-Ledger, AL.com, Mediaite: Within hours afterward, Florida passed a new congressional map that could help the GOP pick up four more seats, Mississippi Gov. Tate Reeves called for a special session on redistricting, Alabama’s attorney general pledged to “act as quickly as possible,” and Sen. Marsha Blackburn (R-TN) called on her state’s legislature to quickly eliminate all House districts in the state held by Democrats.
The Deseret News: Can the U.S. cope with a shrinking population? Statistics show a decline could begin much quicker than perviously thought. (This one is especially interesting to me after above about how Utah — home of the Deseret News — has a growing population.)
Fox News: Speaking of growing markets, the Pentagon is seeking roughly $55 billion for drone and autonomous warfare programs in its fiscal year 2027 budget, as battlefield conflicts from the Middle East to Ukraine expose a growing problem: cheap drones are increasingly able to overwhelm costly U.S. defenses. The funding request is a dramatic surge from roughly $225 million a year earlier.
The Wall Street Journal: Trump Tells Aides to Prepare for Extended Blockade of Iran: The president prefers decisive victories, but none of the available options provides him with a swift exit from the conflict.
WAMU: The administration is seeking access to the health records of millions of federal workers including their prescriptions, diagnoses, and doctor visits. Reporter Amanda Seitz, who broke the story, says the Office of Personnel Management’s notice makes no mention of removing identifying information: “The names of patients, doctors, and their specific diagnoses could all be available to the federal government.”
The New York Times: A.I. Bots Told Scientists How to Make Biological Weapons: Scientists shared transcripts in which chatbots described how to assemble deadly pathogens and unleash them in public spaces.
Thanks for reading. Photo by Vitaly Gariev on Unsplash. I wrote about some of this before at Inc.com. See you in the comments.