What I found surprising was the upside of high unemployment rates in ranking a city. Wallet Hub said entrepreneurs ideally want to open up shop where unemployment far exceeds the number of available jobs, enabling business owners to be selective about who they hire and how much they pay.
For this metric, the economically depressed city of Detroit topped the list with 26-percent unemployment, followed by three cities in California (Stockton, Fresno and Modesto) and Toledo, Ohio.
Some of the other metrics included:
• Average annual salary. Most entrepreneurs need employees but they'd rather not lose their shirt paying high salaries. Therefore, cities with relatively low income levels are extremely attractive. So in Detroit's case, along with its highest unemployment ranking, it also ranked as the city with the lowest salaries, averaging $36,753. Cleveland ($37,245) came in second followed by Hialeah, Fla. ($39,587); Rochester, N.Y. ($42,455); and Toledo ($42,532).
• Lowest cost of living. Local cost of living is important for a few reasons, according to Wallet Hub: It affects pricing and margins for companies, it dictates the wages for employees and, obviously, it determines the entrepreneur's own disposable income at the end of the day. For the most bang for the buck, set up shop in Laredo, Texas. Other top cities in this category included Greensboro, N.C.; Toledo; Springfield, Mo.; and Brownsville, Texas.
• Length of average workday. Fayetteville made the number two spot overall due in part to its people being workaholics, apparently. Many a tire dealer will claim they spend more time in their shop than they do at home. So it can be frustrating when the local workforce is conditioned to punch out at exactly 5 p.m. every day.
Wallet Hub compared the average amount of time people in each city spend at work, with the longest average workday considered optimal. Fayetteville topped this list at 8.38 hours for an average workday, followed by Plano, Texas; Anchorage, Alaska; Las Vegas; and Scottsdale, Ariz.
• Number of businesses per capita. While a bustling business community denotes a strong local economy, it also could indicate a saturated market that cannot support too many more new businesses. For this category, Moreno Valley, Calif., has the lowest number of businesses per capital followed by Fontana, Calif.; North Las Vegas, Nev.; Grand Prairie, Texas; and Port St. Lucie, Fla.
One of the best nuggets of advice included in the report came from David Deeds, director of the Morrison Center for Entrepreneurship at the University of St. Thomas, St. Paul, Minn.: “Do your homework! Research the market in depth. Figure out who your best customers are likely to be and develop a well-thought-out strategy on how you can reach them and convert them to buyers.”
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Kathy McCarron is a Tire Business reporter. She can be reached at [email protected]
