On April 11, 2011 the Puget Sound Business Journal had an online story about the rankings of cities for "Small Business Vitality." Seattle is number one in the west and number five overall. Here's some of the article followed by my analysis.

 

"Seattle ranks among the strongest in the country when it comes to small business. 

According to a new study, Seattle ranks No. 1 in the West and fifth nationally in an analysis of small-business vitality.

The analysis used a six-part formula to identify the markets that are most conducive to the creation and development of small businesses. It considered factors as diverse as local concentrations of small businesses, population growth, and employment gains or losses. The rankings define a small business as any private-sector company with 99 or fewer employees."

 

Three Reasons Why

 

I can easily think of three reasons why the Seattle area ranks so high (and these reasons do not necessarily apply to other top cities).

 

1. Seattle has a lot of smart people. While the density of higher education isn't as high as Boston or the research triangle, we do have half a dozen major universities in the Puget Sound area (and Western 90 minutes away) and a thriving community college system. Smart people tend to be problem solvers and innovators.
2. We have a lot of big companies and the type of big companies that attract smart people and innovation. These include Microsoft, Boeing, Starbucks, Amazon, Costco, Paccar and more. Midsize companies tend to surround these larger firms and many of these employees get to the point in their career where they want to do their own thing. So they start or buy a business.
3. There is a high degree of independence in the area. Seattle is isolated and our local economy tends to not be in rhythm with the national economy. An independent streak often sends people out to be their own boss.

 

Conclusion

 

The bottom line is while some cities are favorable to small business for reasons not given above, many have all or some of these traits (Denver, San Jose, Charlotte, Austin, Minneapolis and Boston to name a few).

Upcoming:

June 14: Speaking at a Clothier & Head seminar
June, date TBD: Roundtable Discussion

Good managers and leaders always say they want their team to have smarter people than they are. It makes sense. As an owner, you have the ideas, drive, and passion. Leverage their smarts to benefit everybody, especially you.

When presenting on the subject of business buying I always stress that any acquisition candidate should have a competitive advantage.

There should be a reason customers are willing to pay enough for the product or service so the company can make a profit. And that advantage should be sustainable.