San Jose Is The Top City For Small Business

Analysis of more than 60,000 companies across the U.S. found that the Silicon Valley hub is the top city for small business; San Francisco in second place.

Newcomers include Colorado Springs; Greater Bridgeport, CT; Salt Lake City; Minneapolis; Port St. Lucie, FL; and Phoenix.

San Jose, California, is the top city for small business, according to the 2024 Biz2Credit Top Cities for Small Business Study, a financial analysis that examines annual revenue, credit score, age of business, and other financial data supplied by companies that applied for funding during 2023.

San Jose is the third largest city in California and the 12th largest city in the U.S. The city is considered the birthplace of Silicon Valley and has a long history of innovation, and this mindset fosters an urban center of learning and creativity – along with fantastic weather. It is home to approximately 66,000 businesses employing a total of 439,000 workers in sectors ranging from advanced manufacturing to healthcare to software, according to SJEeconomy.com. More than 2,500 high-tech companies are located in San Jose, and they benefit from having easy access to the Bay Area and a talent pool filled with residents who have degrees in science, engineering, technology and math.

• 50% of San José residents have a college degree or higher, making San José one of the most highly educated communities in the nation.
• 1 in 3 San José residents have a bachelor’s degree or higher.
• 1 in 5 hold degrees in STEM fields (Science, Technology, Engineering and Math).
• #1 city nationally for foreign-born talent.

Naturally, the city is home to tech giants that include Adobe, Cisco, eBay, PayPal, Verifone, and Western Digital, among others. These corporations help build an ecosystem that enables the small businesses to serve them, as well as their employees. The success of these corporations thereby boosting local real estate, and small firms including restaurants, hotels, retail shops, and service businesses.

Further, San Jose’s Office of Economic Development provides a wide range of business assistance programs that create a foundation for entrepreneurs to develop new ideas and foster economic opportunities. The Office of Economic Development provides permitting assistance, site selection services, storefront grants, collaboration with businesses, government, educational, and community-based organizations to facilitate local employment opportunities. Work2future provides a range of services including, customized training, on the job training, and training partnership opportunities.

Small businesses in San Jose had high average annual revenues ($1,008,279) and strong average credit score (672), according to data collected by Biz2Credit.

Two other West Coast tech hubs — San Francisco and Seattle – are among the top five, along with two newcomers: Colorado Springs, CO, and Greater Bridgeport, CT.

The Colorado Springs economy thrives on military, defense, aerospace, software/IT, and tourism. It is home to the U.S. Olympic Training Center, the Air Force Academy, and several military bases. The city also boasts a highly educated, diverse, and industrious workforce.

The Greater Bridgeport MSA includes Bridgeport, Norwalk, and Stamford, CT. Bridgeport has an active SMBE Department that supports small, women-owned, and minority-owned businesses by addressing their unique challenges through tailored resources and initiatives. The Stamford business community is a tight-knit ecosystem attracting a highly educated and talented workforce for the employment opportunities provided by nearby Stamford’s diverse mix of industries, finance and real estate, technology, management and consulting, digital media, and healthcare make up the majority. The second largest city in Connecticut, Stamford has seen a construction boom in apartment buildings and mixed-used spaces in recent years. The city boasts a rapidly growing tech startup community, a strong healthcare system, top-tier schools, an unemployment rate well below the federal and state level, and residential options for all ages and income levels.

Key Findings of the Biz2Credit 2024 Best Small Business Cities Study:

• The leading industries among the top cities are Accommodation and Food Services, Other Services (except Public Administration), and Construction.
• Average annual revenue increased by 10.4% to $618,000, compared to $560,000 in 2023’s ranking.
• Average expenses also increased by 13.8% to $489,000, from $430,000, resulting in a 1.1% decrease in average earnings, which fell from $130,000 in 2023 to $129,000 in 2024’s report.
• Average credit scores increased by 11 points from 641 to 652.
• Average age of business increased by 12 months, to 69 months, from 57 months.
• Eight cities are new to the list this year – including two in the top five – were: Colorado Springs, CO (3); Bridgeport, CT (5); Salt Lake City, UT (11); Oxnard, CA (13); Minneapolis, MN (19); Port St. Lucie, FL (20); Hartford, CT (23); and Phoenix, AZ (25).
• Eight cities fell off the 2023 list: Milwaukee, WI; Kansas City, MO; San Antonio, TX; Austin, TX; Tampa, FL; Orlando, FL; Las Vegas, NV; and Miami, FL.

Five cities rose in the Biz2Credit rankings from last year, including San Jose (1); Seattle (4); Portland (7); Providence, RI (9); and Baltimore(10). At No. 22, Nashville remained unchanged.

Meanwhile, 11 cities dropped from in the annual rankings: No. 2 San Francisco (previously No. 1); No. 6. San Diego (previously No. 3); No. 8 New York (previously No. 4); No. 12 Boston (previously No. 5); No. 14 Pittsburgh (previously No. 10); No. 15 Denver (previously No. 11); No. 16 Washington, D.C. (previously No. 12); No. 17 Los Angeles (previously No. 6); No. 18 Sacramento (previously No. 2); No. 21 Philadelphia (previously No. 19); and No. 24 Riverside, CA (previously No. 13).

The Top 25 Cities for Small Business for 2024 (2023 ranking in parenthesis) are:

1. San Jose, CA (7)
2. San Francisco, CA (1)
3. Colorado Springs, CO (unranked)
4. Seattle, WA (9)
5. Greater Bridgeport, CT (unranked)
6. San Diego, CA (3)
7. Portland, OR (8)
8. New York City (4)
9. Providence, RI (20)
10. Baltimore, MD (14)
11. Salt Lake City, UT (unranked)
12. Boston, MA (5)
13. Oxnard, CA (unranked)
14. Pittsburgh, PA (10)
15. Denver, CO (11)
16. Washington, D.C. (12)
17. Los Angeles, CA (6)
18. Sacramento, CA (2)
19. Minneapolis, MN (unranked)
20. Port St. Lucie, FL (unranked)
21. Philadelphia, PA (19)
22. Nashville, TN (22)
23. Hartford, CT (unranked)
24. Riverside, CA (13)
25. Phoenix, AZ (unranked)

California is home to 7 cities on the list this year. Florida is represented only by Port St. Lucie at No. 20, and no cities in Texas made the list.

Small businesses saw their average annual revenue increase by 10.4%. However, their expenses increased by 13.8%, a reflection of inflation’s impact on their bottom line.