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The Cheapest Cities For Startups, In One Chart

Think less San Jose and more Little Rock.

The Cheapest Cities For Startups, In One Chart
[Photo: RobHainer/iStock]

If you’re a startup founder with a dream, you may want to swap the Bay Area for the Sun Belt–because your funding can go twice as far in the South than it can in California.

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This finding may sound obvious, but Howmuch.net visualized it in hard numbers sourced from financial technology company SmartAsset. The analysis started with a relatively simple premise: You’re a founder who needs to register and set up your business with professional lawyers and accountants. You need to secure 1,000 square feet of office space, pay utilities, and hire five people for a year. How much will all of that cost, depending on your location?

[Image: courtesy HowMuch]
San Jose and San Francisco are the two most expensive cities on the list, each costing about $420,000 for a year. The East Coast is nearly as expensive, though, with D.C. and N.Y.C. coming in at around $400,000.

Meanwhile, the cheapest city will cost you about half of that: In Chattanooga, Tennesse, you’ll spend $232,000, thanks largely to low labor, which runs $44,000 below the study average. Not hip enough for you? Try Memphis or New Orleans then, each of which will set you back about $240,000. That leaves you a lot of cash left over for live music and étouffée. While founding a startup in a small city comes with its own dilemmas, like a smaller talent pool and tech community, many of these cities are becoming tech hubs in their own right.

[Image: courtesy HowMuch]
Because of the way this visualization is rendered, all cities look exactly the same–you can’t learn much by scanning them at all. However, that sameness proves a point in itself. The distribution of your costs between labor, space, and other factors will be the same nearly anywhere. It’s only the price tag that changes. A business plan is a business plan, no matter the city from which it originates.

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About the author

Mark Wilson is a senior writer at Fast Company. He started Philanthroper.com, a simple way to give back every day.

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