Raleigh Continues to Be a Hotspot for Small Businesses

The North Carolina Chamber of Commerce and the Raleigh Chamber of Commerce have reason to celebrate. In American City Business Journals’ latest edition of its annual small business vitality study, the Raleigh-Cary metropolitan statistical area, along with the rest of "the Triangle" (North Carolina’s Research Triangle), has been ranked third, cementing the area’s reputation as a hotbed of small business success. The study, which identifies and quantifies the most conducive areas for the formation and development of small businesses, took the 100 largest markets in the nation and ranked them using a formula that took into account data on each city’s population, employment, and quantity of small businesses.

For purposes of the study, a small business was defined as any private-sector company with fewer than 100 employees. Though impressive, Raleigh’s ranking is down two spots from No. 1, which the city claimed in 2009’s ACBJ study. This year, Raleigh trailed just behind Austin, TX, which was ranked No. 1, and Baton Rouge, LA, which was ranked No. 2.

The successful progress of Raleigh small business can be attributed to the area’s rapid population growth, which reached 22.5 percent between 2003 and 2008. The Triangle, which is anchored by Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University, is a breeding ground for the research and low costs necessary for small businesses to flourish. The consistent talent needed is covered by the thousands of graduates produced each year by the three research universities in the area, while the smaller size of the area compared to markets such as Los Angeles and New York City helps to keep down costs of living and doing business.

Although it is now a national problem beyond the scope of only Raleigh, Durham, or even North Carolina, the one difficulty facing the area’s small businesses is that banks are not lending as freely as they once were. Because access to credit and capital is vital for small business formation and success, this poses a potential setback for an otherwise outstanding small business market.