Whether it’s to turn a hobby into an income, to make ends meet or to become more financially independent, starting a side hustle is becoming an increasingly popular way of boosting an individual’s income. One in three Americans report having a side hustle outside of their day job to earn additional cash. With the US facing a recession, it’s no surprise that Americans are looking for ways to earn extra income.
With the rising popularity of side hustles, Business Name Generator have compared hundreds of American cities to find out which cities and states offer the best setting for pursuing a successful side business.
What We Did
To work out the best cities and states for starting a side hustle, we took into consideration internet speed, WiFi hotspot availability, Limited Liability Company (LLC) registration and annual fees, business survival rate and the number of small business support centers.
Key Findings
- The overall best city to start a side hustle in is Columbia, Missouri
- The city with the fastest internet speed is Stamford, Connecticut, with an average download speed of 167 Mbps
- Miami, Florida, has the most WiFi hotspots available – 88.5 hotspots per 10,000 population
- The highest business survival rate is in Connecticut, at 70%, and the lowest is in Washington, at only 50%
- The state with the most cities in the top 100 is Colorado, with 10 appearances
The Top 10 Cities for Starting a Side Hustle
1. Columbia, Missouri
Overall score: 79/100
Topping the list of the best US cities to start a side hustle is Columbia, Missouri. From high-speed internet to the wide availability of WiFi hotspots, this city is a promising place to start a side hustle. Columbia is also one of the cheapest places to register a new business. Filing fees in the USA can range as high as $500, but here budding entrepreneurs only need to pay $50 upfront and no fees after that. The city also boasts 11 Small Business Development Centers, where small business owners are able to access no and low-cost consulting and training, making it an excellent place to be located when setting up a side business.
2. Springfield, Missouri
Overall score: 77/100
Second place goes to another city in Missouri. Springfield is the economic hub of Southwest Missouri and a thriving metropolitan area, making it a great spot for side hustlers. It’s known to have a low-cost and pro-business environment and offers plenty of support to small businesses that are starting out. Missouri is also home to some of the fastest internet speeds in the USA.
3. Louisville, Kentucky
Overall score: 77/100
Known for Kentucky Fried Chicken and the Kentucky Derby, the city is also a great choice for budding entrepreneurs looking to start a side hustle. The Midwestern city has a strong startup community and is a great choice when it comes to location, becoming connected to more and more international cities every year. It’s also one of the cheapest places to register a business with a mere $40 LLC filing cost, plus only $15 a year to keep it running.
4. Columbia, South Carolina
Overall score: 77/100
Next on the list is the lively college town of Columbia, South Carolina. Columbia, South Carolina’s capital and second-largest city, has a growing startup ecosystem and a focus on innovation. The southern city has hundreds of WiFi hotspots and one of the fastest internet speeds of all the USA cities we analyzed—perfect for setting up and expanding a side business in the digital age.
5. Jackson, Mississippi
Overall score: 75/100
Known as “The City With Soul,” this state capital is centrally located and home to many new and well-established businesses. Not only does the city boast 100s of WiFi hotspots for all your connectivity needs when starting out, it’s also home to an impressive business community. What’s more, after paying only $50 to register your business, there are no annual fees—meaning you can focus your hard-earned profits elsewhere.
6. Boulder, Colorado
Overall score: 74/100
Despite being the smallest city to make the top 10, with a population of only 104,175, Boulder offers a combination of innovation and community that make it a great place to start and grow a side business. The city has become somewhat of a hub for small businesses and startups across multiple sectors despite its size.
7. Bridgeport, Connecticut
Overall score: 73/100
Bridgeport is a fast-growing, diverse city and a prominent hub for businesses in the tri-state area. It also has the highest business survival rate of the US cities we analyzed. 70% of businesses opened in 2019 are still open three years later, compared to the US average of 64%, making it a great place to start something new.
8. Salem, Oregon
Overall score: 72/100
Oregon is the only Pacific Coastal state to make an appearance in the top 10, with Salem coming in at number eight. 99% of Oregon’s companies are small businesses, meaning side hustlers will be in good company. Here you’ll also notice Oregon’s pro-business climate, which can be seen in the success of previous businesses in Salem: over two-thirds of businesses survived after three years, when some states’ business survival rate was barely over 50%.
9. Pueblo, Colorado
Overall score: 72/100
Pueblo is the second city in Colorado to make the list. This small yet thriving city, with a rich history and supportive community, offers a great environment for side hustle success. Good internet speeds, publicly available WiFi in plenty of locations as well as relatively low business fees make this a great choice for starting a new venture.
10. Springfield, Illinois
Overall score: 71/100
Springfield is a historic city with a bright future. The economy is growing and
It’s also been declared a great place for young people looking to make their fortune: Money Under 30 named Springfield #2 on its list of The Best Cities in America for Young Adults to Get Rich.
Top 5 States for Setting up a Side Hustle
1. Ohio
Overall score: 78/100
Topping the list of the overall best states for starting a side hustle is Ohio. The Midwestern state has outranked traditional business hubs like New York and California, as more and more companies recognize the value of setting up shop in states like Ohio. The state’s economy has grown, as has its population, meaning more customers and more talent. Side hustlers here will benefit from low business costs and access to official support.
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2. Mississippi
Overall score: 70/100
A few points below Ohio, Mississippi, has been named the second best state for setting up a side hustle. Its capital, Jackson, is one of the best individual cities for side hustlers, though the low government business costs and above-average business survival rate make the whole state a suitable option. Mississippi is home to thousands of small businesses and the climate for innovation means there are constantly new opportunities.
3. Kentucky
Overall score: 69/100
Kentucky is a state full of opportunities and combines a healthy business climate with affordability. The state as a whole is friendly to business and is one of the most affordable cities to actually register and run an official company, with LLC filing costs of only $40 and an annual fee of just $15. The Bluegrass State is also home to two international airports and three global shipping hubs, facilitating distribution nationally and globally.
4. California
Overall score: 68/100
California is home to eight cities that appear in the top 100 cities for starting a side hustle. The Golden State is a place where people often go to start their own business ventures as it’s known for providing great funding opportunities, particularly to new businesses in the IT sector. Here, all types of businesses will be able to find the support needed to grow, with 54 Small Business Support Centers across the state. It also has a growing economy and the constant influx of talent means innovation is high.
5. New York
Overall score: 68/100
It’s no surprise to see that New York state, home to the business capital of the world, places in the top five states for side hustlers. Cities in New York had, on average, over 1,200 WiFi hotspots available for use and the second fastest internet speed, following only New Jersey. New York is also the state with the most Fortune 500 companies, with more than 50 headquartered in the state. It’s also home to 2.3 million small businesses, according to the U.S. Small Business Administration Office of Advocacy. Whilst the business environment is competitive, it presents lots of opportunities to budding entrepreneurs and those looking for a side gig.
Methodology
We defined a city as an “incorporated place” with a population of over 100,000. As of July 2021, there were 331 cities in the USA with a population of at least 100,000, as estimated by the United States Census Bureau. Five states—Delaware, Maine, Vermont, West Virginia, and Wyoming—have no cities with populations of 100,000 or more. In these cases, we have included the largest city in each state (by 2022 population estimates) in the index.
To reflect which cities located in the USA would be the best to set up a side business, we analyzed the following criteria:
Internet download speed (Mbps) was gathered from www.bandwidthplace.com. For cities where no download speed was available, the state average was used.
Wifi hotspots per 10,000 population was calculated from the number of hotspots according to www.wifimap.io, divided by the 2021 population estimate. For the top states, we looked at average hotspots per city, rather than by population.
LLC filing cost and biennial fees, the one-off and ongoing state-wide fees required to create and maintain a Limited Liability Company, were sourced from www.llcuniversity.com.
Business survival rate was calculated from bls.gov establishment age and survival data. We compared the percentage of businesses open in 2019 that were still open in 2022 (3 year business survival rate).
We also compared the number of Small Business Development Centers from the americassbdc.org network in each city.
Each city was ranked according to each criteria. We then averaged the scores for each city across all categories to generate a final score.