Which cities gained and lost the most small businesses in the past year?

Starting a small business is a noble endeavor, but it’s not without risks. Many small business owners operate without a safety net, so any unexpected event or crisis could jeopardize their business. According to the U.S. Small Business Administration Office of Advocacy, some of the most common reasons why small businesses close are low sales, the owners’ retirement or a decision to sell the business. However, sometimes, small business owners close up shop in one place to open up in a more promising location for them and their business.

Ooma has gathered data on the locations in the United States that thrived due to an increase in small businesses or suffered from the loss of small businesses throughout 2023 and 2024 to determine which areas of the country are currently most attractive to small businesses.

Which areas gained small businesses?

The Lakeland-Winter Haven metropolitan area in Polk County, Florida, saw the most significant increase in small businesses in the United States. In 2023, Lakeland-Winter Haven had 64,086 small businesses. Another 12,716 businesses, or 19.84 percent, were added in 2024, putting the number of small businesses in the area at 76,802.

The Orlando-Kissimmee-Sanford metropolitan area in Florida was next in growth, adding 49,530 small businesses, or 14.52 percent, over the year. They went from 341,227 to 390,757 between 2023 and 2024.

The Augusta-Richmond County metropolitan area in Georgia and South Carolina saw an increase of 6,926 small businesses, from 50,807 in 2023 to 57,733 in 2024. This is an overall 13.63 percent increase in the span of a year.

Out of 30 metro areas that saw gains throughout the year, six of them were in Florida. Florida is known for its low tax burden because there is no personal income tax. Necessities and many business expenses are also exempt from sales tax. Though the cost of living in Florida is higher than the U.S. average, it is still lower than in major economic hubs elsewhere in the country. Additionally, employers are not required to provide employees with sick leave or vacation time. All of these factors make Florida a popular spot for businesses to operate.

Which areas lost the most small businesses?

Among places that experienced a drop in the number of small businesses, the Los Angeles-Long Beach-Anaheim metropolitan area had the most significant loss, with 100,000 small businesses closing over the course of a year, or 5.56 percent. This loss brought their 1,800,000 small businesses in 2023 to 1,700,000 by 2024.

Another region in California also saw a significant decrease in small businesses. The San Francisco-Oakland-Hayward metropolitan area went from 554,041 small businesses in 2023 to 529,637 in 2024. The loss of 24,404 businesses translates to 4.40 percent of the area’s total quantity of small businesses.

What are the best small businesses to open?

Though there’s no such thing as a 100 percent foolproof business plan, some businesses are much more likely to remain necessary to consumers for years to come. Businesses that offer essential products or services are more likely to succeed, even in times of economic downturns or uncertainty. It’s important to note, though, that some types of businesses will require greater initial startup costs and more licensing and certification than others.

• Health Care: Health and dental clinics, practices and pharmacies will always be necessary.
• Groceries: While most areas have established general groceries in place, specialty grocery markets may still do well.
• Cleaning and Janitorial Services: Cleaning services typically have a low barrier to entry and low startup costs and are likely to be in demand even in areas with a smaller population.
• Laundromats: Clean clothes are a necessity everywhere.
• Landscaping: The downside of landscaping is that it is a seasonal business, but when it is in season, it can be profitable enough to sustain you through the rest of the year.
• Plumbing: Plumbing is another service that will be a necessity regardless of the location. There will always be a house with a leak or clog that needs fixing.
• Auto Repair: The majority of adults in the United States own cars, which need regular maintenance and repairs.
• Power Washing: Power washing is something that anyone can do. And unlike some other businesses, it does not require extensive training or education.

If none of these ideas seem appealing or plausible, industries such as insurance, hospitality, and real estate are other promising possibilities for a small business, depending on the location and local demand. Think about how your service or product can solve a problem for others as you decide what type of business to start, and throughout this process, remember to remain flexible and realistic with your expectations.

The cities that gained the most small businesses in the past year

The cities that lost the most small businesses in the past year

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