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Chicago Among Top Cities for Small Business

Published: Wednesday, June 18, 2014 9:41 a.m. CDT

By Paul Tooher

Chicago is among the top 40 cities in the nation for small business, according to a recent survey by the American City Business Journals.

Chicagoland ranked 38th of the 101 communities surveyed.

To create its ranking, the ACBJ said it looked at the number of small businesses per capita in a metro area; population growth; employment growth and the rate of small business growth. The ACBJ defined a small business as any firm with 99 or fewer employees.

There are 23 million small businesses in the United States that account for 54 percent of all sales in the country, according to the U.S. Small Business Administration. The number of small businesses has increased by 49 percent since 1982.

Small businesses provide 55 percent of all jobs in the nation and are responsible for 66 percent of all net new jobs since the 1970s. While big businesses have eliminated 4 million jobs since 1990, small businesses added 8 million new jobs.

The Chicago metro area earned a score of 1.21 on the ACBJ survey, with 229,940 small businesses, or 24.22 per 1,000 residents. During the past five years, the number of jobs in the private sector has increased by 0.5 percent while the general population has grown 0.5 percent over a two-year period.

By comparison, Austin, Texas, was ranked as the best city for small business, earning a score of 12.66, with 40.966 small business, or 23.01 per 1,000 residents. The Texas capital has seen private sector employment increase by 16 percent in the past five years while its population has grown by 6.2 percent during a two-year period.

Other cities making the top 10 list for small businesses included Miami; Provo, Utah; San Jose, Calif.; Houston; Bradenton, Fla.; Oklahoma City; Orlando, Fla.; Denver and Raleigh, N.C.

Memphis, Tenn., was rated the worst city for small business, behind Lakeland, Fla.; Wichita, Kan.; Stockton, Calif.; Youngstown, Ohio; Chattanooga, Tenn.; Scranton, Penn.; Augusta, Ga.; Jackson, Miss.; and Dayton, Ohio.

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