Austin keeps winning Best-of lists, and once again we’ve snagged the top spot. Austin is No. 1 among America’s 20 Best Places to Start a Business, according to a new report by CNBC.
CNBC also reports that according to the 2016 Kauffman Growth Entrepreneurship Index, Austin startups grew by 81.2 percent in the past year, faster than every city except Washington D.C. Moreover, the Kauffman Index found that “the greater Austin area is breeding the highest rate of new entrepreneurs in the country,” reports CNBC.
Austin’s Black Chamber of Commerce, which recently connected local businesses during an event at Google Fiber downtown, sees CNBC’s report as showing potential to lift all boats in Austin’s rising tide of startups.”Austin continues to provide the factors that make it friendly to do business in the face of diversity issues and other challenges. We are definitely trending up within all business categories as we also see an increase in black women owned businesses, as well,” says Tam Hawkins, the chamber’s president and CEO.
CNBC ranked cities with populations greater than 500,000 in categories such as business costs, quality of life, and small-company success. Other factors boosting Austin to the top spot include low tax rates, highly educated residents, and a relatively affordable cost of living.
Austin continues to provide the factors that make it friendly to do business in the face of diversity issues and other challenges
The presence of the University of Texas at Austin (UT) and other local universities, like Huston-Tillotson, St. Edwards, and Texas State, contribute to the city’s well-educated workforce, which lures employers and helps fuel growth.
“I agree with the data points in the CNBC News report about why Austin’s a great place to start a business. The primary reason why I’ve chosen to start two businesses here is chiefly because of the strong community of mentors and advisors along with the low cost of owning a business,” says Sterling Smith, founder of Keystoke and SandBox Commerce.
CNBC’s report also recognizes some downsides of starting a business in the Capital City: lack of venture capital, lack of office space, and traffic congestion. Some might add to the list lack of diversity in business.
Since two UT studies revealed Austin as an anomaly among U.S. cities because it’s Black population decreased between 1999 and 2010 while the total population grew, the city has been criticized for lacking diversity.
However, like others feeling the pulse of the Austin business community, Marcus Carey, founder and CTO of vThreat Security in Austin, sees the city’s viability for startups as a potential trigger for more business participation by people of color.
“Austin has certainly been good for me as an entrepreneur,” says Carey. “If Austin attracts more diverse investors and mentors it will help with the lack of diversity here. People tend to invest in people that they can relate to. It also is motivating to see successful entrepreneurs that have been successful that you can relate to.”
Along with Austin, five other Texas cities made CNBC’s Top 20: Houston (No. 6); Dallas (No. 8); San Antonio (No. 10); McAllen (No. 12); and El Paso (No. 16) .