America's 12 Worst Cities for Small Business


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Entrepreneurs are bold and ambitious, yet no matter how much moxy small-business owners have, their chances of success are directly tied to the city where they set up shop. From local economies and taxes to population growth and education levels, some cities have far more to offer or -- or -- in the case of these 12 cities -- much less.
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The city of Bakersfield was enjoying an economic boom, but it had far too many of its eggs in the energy basket. When the oil industry crashed, so did the city's economy. The other major industry is agriculture, which is also suffering a downturn. That leaves small-business owners catering to a population that is financially anxious and tight with their dollars.
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The city of Providence is an academic epicenter, but students have a tendency to leave the city once they graduate from its many colleges and universities. Population growth is stagnant, unemployment is high, and Rhode Island as a whole, according to CNBC, has been the worst state for business in the entire country for years, thanks in part to the Rhode Island's notorious talent drain.
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Louisiana's economy is among the very worst in the entire country, and small-business owners in the state should know that things are especially challenging in Shreveport. In 2013, the city ranked dead last in the entire nation in terms of economic growth, and things have not improved much since. Unemployment is high, job growth is negative, and people are leaving the region.
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Both the cost of doing business and the cost of living are low in Fort Smith, the largest city in Western Arkansas. The problem, however, is that just five states have lower college attainment rates. Business owners considering putting down stakes in the city should also know that a downturn in the farming economy has created an overall slowdown in income growth in the state.
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In a recent study, the city of Columbus ranked high among mid-size American cities that have not yet recovered from the 2008 recession. Unemployment is high, the city is suffering from depopulation, and the largest employer by far is Fort Benning, a U.S. Army post.
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Before opening a business in York, entrepreneurs should know that called the mid-size city of 43,000 "the poster child for Pennsylvania's municipal pension problems." With more than $60 million in pension-related debt in 2015, the government had to spend one budget dollar out of four to fix the problem. This opened the door to deep cuts to all city services except law enforcement.
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Before starting a business here, entrepreneurs should know that Montgomery has suffered a population decline for several years, landing it a place among the bottom five in the entire country in terms of migration. The state as a whole is -- and has for a long time been -- suffering from budget woes brought on by flat growth and skyrocketing costs associated with the prison system and providing health care for the poor.
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Reading was ranked as the second-poorest city in the country in 2016. It's had a place among the 10 poorest, and sometimes been the very poorest, for much of the past 10 years. Reading is currently bound by Act 47, or the Financially Distressed Municipalities Act, which, among other things, affects how businesses and residents are taxed. The act also restricts the town's access to government funding.
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Economically depressed Flint was already a difficult environment for budding entrepreneurs. The city is losing residents at a faster rate than any city besides Detroit, unemployment is higher than average, and there are so many vacant houses that Flint is one of the last cities in the U.S. with a five-digit median home cost. Then, the worst water crisis in modern history affected the health of thousands of residents, increased depopulation, and depressed economic output.
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Brownsville is frequently named the poorest city in America, and the larger Rio Grande Valley is one of the country's poorest regions. Homelessness, hunger, and waves of illegal immigration blight the border town, where more than one in three residents live below the poverty line. Both its high school and college attainment figures rank among the bottom three in America.
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Entrepreneurs considering setting up shop should consider that Huntington is one of the hardest-hit cities in one of the states suffering most severely from the nation's opioid crisis. The town's mayor estimates more than one in 10 residents are addicted. The larger metro region is losing residents, and fewer than 20 percent of the area's population are college-educated.
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A booming, thriving vacation destination in its glory days, Atlantic City is now a dying town. Its unemployment rate has been as high 13.8 percent, and the city also suffers from a high rate of mortgage foreclosures. Its once-teeming beaches and boardwalk are all but empty, and at least four casinos have closed in recent years, causing a massive hemorrhaging of jobs. What's more, the job losses are expected to continue a pace through 2018.