An entrepreneur has many concerns: funding, staffing, developing a marketing strategy and ensuring that they have a viable product or service. Before beginning the process of starting a business, however, there is one important decision that must be made: where to start the business. The adage “Location, location, location” has merit, not only for real estate, but for a successful business venture. A variety of features will affect what makes a location suitable or not suitable for a business, and the wise entrepreneur will examine those features carefully before deciding to move forward with a venture. Many times, the location of the company is decided based on what is good sense for the entrepreneur, with little thought or regard paid to the location of the company. While it is nice to think, “If I build it, they will come!”, the reality is that the company that uses the motto, “If I build it where they are, they’ll come” may, in the end, be more successful.

A Guide to Choosing a Location for Your Startup

© | Syda Productions

In this article, we look at, 1) why location is important, and 2) the best places for startups across the world.


Access to funding

Start with the money. Location is important to give you a close proximity to potential investors and mentors. While it is possible to secure investors who are not near your business, it is easier to find people who are familiar with the area or market and who can see firsthand what your business will be doing. In addition, your location will determine the network that your company establishes. By joining a network of similar businesses, you can take advantage of training and support that your new company will need.

Tax and legal incentives

Location can also determine the legal and financial impact on your new business. Government incentives are often based on businesses established within certain geographical lines. Income and sales taxes are also affected by the location you choose for your business. It is wise to check the areas around where you wish to start your company. Would crossing over a state line make better financial sense?

Office costs

The expenses associated with setting up your office can also be determined by location. Are you affected by zoning requirements? Does your office need space to allow for expansion? Are rents higher in different areas? Will you have access to the resources that you need for your business? What are the specific needs that your company will have? Does the area you are looking at meet those needs, or would it be cost effective to transport the materials you need to your startup area?

Staffing needs

Considering future staffing needs is important when determining your business location. Does the area you chose have the human resource to meet your staffing needs? How accessible is your location to transportation? Establishing a company that you cannot adequately staff is counterproductive to your future success. Make sure that there is enough labor available for the type of business that you are starting. If you are involved in a startup that requires highly intensive and detailed work, most likely you would not want to start your business in a rural community. Investigate the available labor pool in your chosen area.

Quality of life

The quality of life in the area you have chosen is equally as important. While business owners would like to think that their company is attraction enough to draw someone to a town, the reality is that people have a life outside of work. The area that a company is established in can be either a help or a hindrance – attracting quality employees is easier when the area you are doing business in has a high quality of life.

Access to incubator programs

As a startup, it can be difficult to navigate the minefield of regulations, startup costs, advertising, as well as all of the other details included in simply running your business. Locating your company in an area that is rich with incubator programs for startups will assist you in making sure you have the resources you need to be a success. The sad reality is that most startups fail within the first few years of business – not because of their product or service, but because of poor management. Establishing your company in an area that has all of the things you will need can help you begin your road to success.

Global Technology Trends & Startup Hubs 2014

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1. Silicon Valley, California, USA

This San Jose, California area is prime location for startups of all stages. In sheer numbers, Silicon Valley raises more capital than any other area. It is home to more entrepreneurs who start multiple companies than other locations and is considered the premier startup location for businesses. Boasting the temperate California climate, this coastal state is a magnet for people, creating a workforce that is rich in available labor.

Some of the largest and most recognizable companies in the world are based in the Silicon Valley area: Netflix, Apple, Inc, eBay and Twitter, to name a few. Tesla Motors and LinkedIn both claim Silicon Valley as their home as well, giving the area a wide range of versatility.

2. Tel Aviv, Israel

This tiny area is home to more tech startups than anywhere else in the world. Surprisingly, there have been more Israeli companies on the NASDAQ than the combined number from Europe, India, China and Japan. While they seem to be falling behind in using newer technologies, they are still a powerhouse and will remain a world leader in the area of tech startups.

Most notable in the list of companies that base their organizations out of Israel is Water-Gen. Designed specifically for military applications, this startup offers a water maker to let soldiers produce water – no matter where they are. Wix is another startup that has people talking all over the world. The web design software gives users a drag and drop tool to build websites and develop an ecommerce site. They raised over $127 million when they went public – one of the highest Israeli public offerings in years.

3. Los Angeles, California, USA

Known for its glitzy lifestyle, the buzzing community of LA is also home to some of the largest number of angel investors and Internet based businesses. The investors of LA tend to be more practical – they are generally active in a field before becoming an investor or a startup in the industry. A diverse number of companies call Los Angeles home, and it is the starting place for some of the most recognizable names in the world, particularly in the entertainment industry. A few of the other places that got their start in LA? Office supply giant Avery Dennison, Budget RentaCar, Harbor Freight, and Netter Digital.

4. Seattle, Washington, USA

If you are searching for a location to start a tech company the northwest corner of the United States is home to Seattle – an area that has perfected the art of raising capital. It has a tendency to be a slow adopter of new technology, but still has an established reputation as being a viable market for new tech companies. Choosing Seattle as your startup’s location puts you in good company: Boeing Aerospace, Starbucks, Zillow, and Costco all hail from the rainy northwest.

5. New York City, New York, USA

Famous for shopping and dining, as well as being a global finance market, New York City also ranks high for female entrepreneurs who are looking for a startup market. Interestingly, there are fewer mentors available there, so while you may find the money, it may be more difficult to navigate the tricky road to startup success. What companies have turned to the Big Apple to pursue their entrepreneur dreams? Avon, Coach, Dick’s Sporting Goods and Estee Lauder all call New York home. (Did you notice that 3 out of the four companies listed were started by females? No? Go ahead and guess. We’ll wait.)

6. Boston, Massachusetts, USA

Long hailed as a bastion of higher education, it may surprise you to know that Boston is a favorite market for startups as well. Statistically, more entrepreneurs in Boston have a PhD than in Silicon Valley. Boston boasts of a market rich in highly educated employable people. When considering a startup in a market that requires personnel who are highly trained and prepared for exacting work, Boston has a field rich in available labor. Startups that have made Boston their headquarters include Facebook and Vee24. With a wide cultural availability, there are many features that draw people to Boston and make it an attractive place to live and work. Baskin Robbins, Filene’s Basement, Genzyme, and Vertex Pharmaceuticals have all enjoyed the cultural climate of Boston, and have spread their influence to the world.

7. London, England

The leader in European tech market startups is found in England. With a significantly smaller number of startups than the output of the United States leader, Silicon Valley, London has plenty of room to grow, but still leads Europe. Home to, Thread, TransferWise and a multitude of other companies, the opportunities for both investors and entrepreneurs are plentiful. While some of the startups are geared towards the European market, many of the companies are beginning to extend their reach abroad to the United States and across the globe. The London scene has watched some exciting companies spread their wings under the watchful eye of Big Ben: Llustre, an e-commerce site designed for home design fanatics, this site offered low pricing of exclusive and limited edition items for the home. GlaxoSmithKline can claim the London skyline as their home as well.

London’s Tech City Compared To Startup Hubs Around The World

8. Toronto, Canada

Canada’s answer to Silicon Valley is found in Toronto. This tech market is an early adopter of new technology, has a workforce bursting with ambition and is loaded with mentor support for startups. The downside of Toronto’s market is their overwhelming dependence on outsourcing their labor and the fewer people they employ per development stage. The far north was the beginning for Citibank, SMTC, TD Canada Trust and more. Diversifying their startup field, they have added film companies to their collection of startups with Impulse Film Production as one of their more recent additions.

9. Vancouver, Canada

Mobile enterprises are a favorite among Vancouver’s startup financiers, which is appropriate with their tendency to favor niche markets. However, similar to Toronto, they are lacking in funding for the later stages of a startup which hurts their overall attraction to new startups. 1-800-GotJunk, Bryght Services and LionsGate Entertainment are examples of the companies that found their start in Vancouver.

10. Chicago, Illinois, USA

Home to Groupon, the cost-saving website powered by group purchasing, Chicago recently saw the number of startups in their city double. Rich in mentor support but lacking in funding and talent, the city has the potential to develop into a hot spot for startups. They need to focus on attracting investors as well as entrepreneurs. The cultural aspects of Chicago make it an attractive place to live, which should help with drawing people to move there. Crate and Barrel, Google Affiliate Network, LandsEnd, Motorola and SSA Global Technologies are all based in the windy city.

1871 – Chicago’s Digital Startup Hub

11. Berlin, Germany

This capital city is beginning to boom as a startup city –and is attracting global attention for affordable rents, talented workforce and invigorating social climate. More and more companies are not only recognizing the attraction of this European city, but startups are popping up all over the city. Angel funding and seed funding is readily available, and other nations are beginning to realize the viability of investing in Berlin startups. Gidsy, the online based service where you can sell your expertise on any subject makes its home in Berlin, as well as EyeEm – the mobile camera photosharing service. SoundCloud – the so-called poster child of Berlin startups – is considered the biggest streaming site in the world, proving that startups in Berlin can not only succeed, but can even turn a profit.

12. Barcelona, Spain

When you think about Barcelona, you may think about the Olympics (held there in 1992), the beaches, and music festivals…anything but business startups. But this Spanish city is a fascinating mix of creative inspiration, profitable business opportunities and an engaging lifestyle that makes it extremely attractive to startup founders.  With a subtropical Mediterranean climate, an international airport and affordable office space, it is a draw for talented people who are looking to make a name for themselves in the booming startup market. A few of the hottest startups to come out of Barcelona? ReviewPro – This aggregate review site combs the internet for information about hotels and then analyzes the information for a social networking based view of the hotel’s features and accommodations. BMAT (Barcelona Music and Audio Technologies) developed software that can interpret music based on vocal range and expression.

For an entrepreneur, it can be nerve wracking attempting to maneuver through the world of starting a company. The nitty-gritty details of the company can get lost in the process of trying to do the work that you want to bring to the world, while trying to do the necessary things to get a company started. Balancing that workload, the startup can flounder and ultimately fail with the entrepreneur does not do adequate research before beginning the company. Location is one of the pivotal points of consideration, and can affect almost every aspect of the company. Taking the time to investigate multiple locations, even inquiring about finding locations that are more tax friendly or give breaks based on the demographics of the workforce will save both time and money in the long run.

No matter where in the world you are considering your startup, you are bound to be both nervous and anxious. By choosing a location wisely, you eliminate some of the worry that is associated with a new startup. One less thing to worry about is a very good thing indeed.

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