Study: The 10 Best Cities for Small- to Medium-sized Businesses in 2018

2018 is the year of beauty bloggers, facemasks, jade-rolling, crystal healing, K-beauty and more, and SMB entrepreneurs nationwide are capitalizing on the health & beauty craze. This week our team revealed the top cities where SMBs flourish, and the top business categories in those cities, based on data from more than 30K U.S. merchants who run their online shops using our platform.

After adjusting per capita, we found that Scottsdale, Miami and Memphis hold the top three spots in the nation for volume of SMB merchants during the first half of 2018.

After adjusting per capita, we found that Scottsdale, Miami and Memphis hold the top three spots in the nation for volume of SMB merchants during the first half of 2018. In addition, the most successful category by average revenue was health & beauty and it is the only top category that appeared across all 10 enterprising cities.

“We have our finger on the pulse of what’s shaping small- and mid-sized businesses nationwide and we’ve seen a boom in online stores focused on health & beauty, as entrepreneurs understand consumers are adopting healthier habits and looking for beauty and wellness products that are actually good for them,” said Kevin Sproles, our CEO and founder. “Every city in this year’s Top Enterprising Cities list is on the health and wellness kick and it’s great to see new towns with a surge in entrepreneurship, including this year’s top five – Scottsdale, Miami, Memphis, Austin and Atlanta.”

The Top 10 Enterprising Cities

Florida is a popular state to start a small business as the Sunshine State is the only one with two cities cracking the top 10, Miami and Tampa, with the latter being the only city that made an encore on this year’s list. It’s no surprise that the number one city, Scottsdale, which is well-known for spa resorts, would be a hotbed for health & beauty businesses but it’s also popular for automotive and home & garden. The second biggest revenue maker after health & beauty is sporting goods, which is a top category in five cities, Austin, Atlanta, Las Vegas, Irvine and Tampa.

Our top 10 entrepreneurial cities by volume of merchants and most successful business categories based on average revenue include:

• Scottsdale, Arizona: automotive, health & beauty, home & garden
• Miami, Florida: apparel, home & garden, health & beauty
• Memphis, Tennessee: industrial equipment, home & garden, health & beauty
• Austin, Texas: health & beauty, apparel, sporting goods
• Atlanta, Georgia: apparel, sporting goods, health & beauty
• Las Vegas, Nevada: health & beauty, apparel, sporting goods
• Orlando, Florida: apparel, automotive, health & beauty
• Irvine, California: health & beauty, apparel, sporting goods
• Tampa, Florida: sporting goods, music/books/DVDs, health & beauty
• Reno, Nevada: electronics, health & beauty, business services

The SMB Tip Jar

Entrepreneurs from the most enterprising cities shared some of their most helpful tips for running and selling goods in their online business:

Have functionality that works for both new and more sophisticated stores.

Set up your business to scale. Rapid growth is fantastic but it can place a strain on your resources. Make sure you choose an ecommerce solution that scales with you as you grow. That means having functionality that works for both new and more sophisticated stores. When talking to different ecommerce platforms, ask the right questions: What types of features do they include to spur growth? What types of payment systems are available to you as your company evolves? What sort of costs will you incur as you grow? What works for a startup won’t be cost-effective for a larger company. Partner with an ecommerce software that will help you thrive in both the early and later stages of your business.

Sell on multiple channels. The ecommerce ecosystem is becoming more diverse every year, and successful store owners engage every profitable channel. In addition to having an online store, you should also have a presence in Google Shopping and Amazon, explore affiliate networks and leverage social channels like Instagram and Pinterest.

Don’t stop at marketing – remarket. Remarketing is one of the most powerful tools in the modern marketer’s toolkit. This strategy places ads in front of people who had previously visited your website and encourages them to return and purchase. Due to the targeted nature of these ads, they are effective at reinforcing your brand and bringing in additional sales.

Finding complementary companies can be an effective strategy for fast-tracking growth.

Explore mutually-beneficial partnerships. Finding complementary companies can be an effective strategy for fast-tracking growth. Look for companies online or at industry events that share a similar customer base, and then engage those businesses respectfully on social media, or contact the owners to explore cross-promotional opportunities.

Show how much you value your customers – on every level. While it’s always been important to treat your customers with respect, 2018 is the year of showing them how much you value their trust and privacy. This means treating their personal data with respect and following the new GDPR guidelines.

Our "Top 10 Enterprising Cities" Methodology

We analyzed 30,000 SMB merchants across the United States between Jan. 1 to June 1, 2018 to identify top cities in our Enterprising Cities Report. We determined top cities by adjusting per capita with cities of populations more than 200,000. Most successful categories were determined by average revenue.

Have any questions about our 2018 study? Let us know in the comments!