A small city in southern Illinois has all the ingredients to be a startup hotspot.
Carbondale, Ill. is the second best small city in the US to launch a business, according to a recent WalletHub analysis, coming in just behind Holland, Mich.
The analysis covered 16 metrics, across three key dimensions: business environment, access to resources, and business costs. When broken down across these factors, Carbondale ranks first in lowest labor costs and highest average growth in number of small businesses, and boasts the second shortest average work week of the 1,261 small cities WalletHub analyzed.
Beyond Carbondale, North Chicago is ranked #15. Wilmette got a nod as the fifth most educated workforce. East St. Louis, Ill. has the second lowest labor costs after Carbondale. On the other end of the spectrum, Galesburg, Ill. has the third lowest average growth in number of small businesses.
WalletHub set out to quantify the best small cities to launch businesses, noting smaller hubs with low overhead costs can be better for ventures just getting off the ground.
Ellen Rudnick, senior advisor on entrepreneurship and adjunct faculty at University of Chicago Booth School of Business, pointed out that the trade off between cost and more robust resources often depends on the small city.
“University towns can be very good for starting high growth companies (e.g. tech) because of their access to local universities with students, faculty, resources and generally more affordable housing than larger cities,” she told WalletHub. “They also may be perceived to have a more attractive lifestyle.”
“For many small cities, lifestyle businesses such as restaurants, housing related services and reail may be easier to get started,” she added. “Also light manufacturing or assembling could be good businesses in small towns as labor costs might be lower and there might be tax incentives. I think a lot of it depends on the type of business and the availability of the appropriate talent.”
In the case of Carbondale, they do have a major university in town (Southern Illinois University–Carbondale) as well as close proximity to St. Louis. While its startup activity (according to Angel List and F6S) is relatively light, there’s a local economic development office, Forbes recently noted SIU-Carbondale graduates a particularly high number of founders, and there’s a growing community of tech events such as HackSI, a hackathon run by remote Yahoo engineer Dav Glass.
And while Carbondale may still be a small city, it’s a hub in a largely rural regions, Robyn Russell, director of business development and international trade at SIU told KFVS.
“I do get excited about seeing Carbondale grow because when Carbondale grows, the entire region grows because we are a rural area down here and you know how Carbondale is kind of the epicenter of that, so that growth spreads out into the smaller towns and counties around here,” Russell said.