Small Town vs Big City for Businesses: 3 Things to Consider

For most of American history, large metropolitan cities have been linked to entrepreneurship and big business. New York City, Boston, Chicago, Philadelphia, Los Angeles, San Francisco… the list of huge business-focused cities in this country can go on and on.

But because of this focus on big cities, many are becoming very expensive, crowded, and hard to thrive in as a new business. Because of this, many entrepreneurs, startups, and businesses are taking their ideas and their companies to smaller towns and cities around the country.

Before you decide to do this with yourself and your business, keep reading. We're going over 3 things you need to consider when choosing between a small town vs big city options for your company.

1. Office Space

One of the main things that are driving people out of larger cities is the issue of space. 

New York is perhaps the most classic example of overcrowding. But most major cities like Boston, Los Angeles, Chicago and more are all becoming very crowded for businesses. This decreases the amount of permanent and private office space that’s available to companies.

One solution besides moving from a big city is to opt for a coworking space that can be rented out as needed. This decreases expenses and the need to have large amounts of employees in the crowded cities. 

Other businesses find it easier to move to city suburbs or locations that are somewhat close to metropolitan areas in small towns. However, a big drawback with that solution is that the business address is no longer as impressive or prestigious. 

That’s where virtual office space and addresses can come in. These services allow businesses to use a virtual office that’s located in the center of bustling cities without having to actually take up residence there. This can give your company a great address without the cost or crowding of staying in a “real” office. 

2. Opportunities

Perhaps the biggest thing you need to consider is your opportunities. Depending on your industry and your business, small towns or smaller cities might not have the resources, opportunities, or workforce you need to be successful. 

For example, many large tech companies and pharmaceutical companies have set up shop close to the country’s top tier universities. 

Cambridge, MA (Harvard and MIT), Boston, MA (BU, Northeastern, etc), CalTech, UCLA, and more are all common. This gives them access to the brightest minds in the world along with connections to those universities for funds, scientists, and connections.

However, not all businesses necessarily need large cities to get opportunities. Plenty of companies can thrive in small towns, and perhaps would do better in a small town vs big city options.

Think about restaurants for example. New York City has over 26,000 restaurants. That’s quite the competition for a brand new restaurant business, right? 

What about if instead of there you opened your restaurant in a smaller city or town that only has a few other restaurants? You might see more opportunities for success and it will allow you to thrive.

This idea can apply to many industries and businesses. And remember: the reverse is true as well. Moving certain business or company types to small cities and towns could mean cutting your opportunities way down, which could mean trouble.

Really consider your business and your location options to ensure you’ll have enough business to survive.

3. Expenses

More than half of new businesses fail within their first five years, and many fail because they’re in a bad location and didn’t have enough financing to make it.

Take the time to make a thorough budget and business plan when considering the location of your business. Even if larger cities have more opportunity for you (as we just went over), can you afford big city prices? 

Almost everything is more expensive in a large city from salaries for employees to services you need to office space… the list of expenses goes on. Smaller towns and cities are much less expensive, which can make it easier in the first few years of your business’ life. 

Remember: you can always move to a large city once you grow!

If you really can’t move to a small town because of a variety of reasons (family, opportunity, networking, etc), consider coworking office space or a virtual office address to decrease your costs. Office space in a large city is likely going to be one of your largest expenses, so reducing that through rentals and virtual addresses could be the key to staying in that type of location.