Smaller Cities Can Get Big Boost From Larger Neighbors

As part of its recognition of National Small Business Week earlier this month, the personal finance website WalletHub released a report on the Best Large Cities to Start a Business, and Florida was well represented on the list.

Four of the top 5 cities in the 2024 ranking are in the Sunshine State, with Orlando topping the list, along with Tampa, Jacksonville and Miami. All told, six Florida cities are among the top 20 places identified by WalletHub as the best places to start a business. But what does it mean for smaller cities and towns?

In Volusia County, Ormond Beach Director of Economic Development Brian Rademacher said there is a “trickle-down effect” for smaller cities when larger regional urban areas are attracting a lot of new business development.

“I believe there is a ‘trickle-down effect’ or perhaps a multiplier effect to smaller cities when the metro areas are successful in attracting new business development,” he said. “A start-up that moves into second-stage growth and beyond will be growing market share and building a resilient local and regional supply chain. This effort can lead to the discovery of smaller cities and the opportunities they afford their business for growth. This can lead to expansion opportunities, leveraging existing businesses and possibly workforce if the proximity makes sense. Inherently, as recognition of business development growth is published it brings attention to the region. Entrepreneurs and C-Suite executives are savvy and explore all the options a city and region has to offer, which can lead to identifying smaller cities with great potential.”

Rademacher said smaller cities can position themselves to compete with larger cities in attracting economic development opportunities.

“Maybe it’s a mix of competition and complementation,” he said. “Take Ormond Beach for example. We are a coastal city with approximately seven miles of pristine beachfront and an eclectic downtown with local retail and restaurants. Small cities can identify features and assets they can market to draw people to their community. Second, a well-defined marketing strategy can effectively position small cities to compete. These strategies can focus on advantages like more affordable available land, greater proximity to market, dedicated workforce, etc. Third, I will always advocate for small cities to participate in regional economic development efforts. It’s important for smaller cities to be engaged in regional business attraction efforts. Businesses are not always looking to locate in the big cities, but they start there because they are known.”

“Business is going to locate where it provides the best opportunity for success,” said Scott Maynard, senior vice president for economic development at the St. Johns County Chamber of Commerce. “For some businesses, the larger population size is important for workforce needs.  If they are seeking other factors, like quality of life, quality of schools, less traffic, then a smaller community like St. Johns County is ideal.”

Maynard said smaller communities can compete with larger cities by offering prospective businesses a skilled workforce and a sustainable talent pipeline.

“Having a pipeline of a quality-educated workforce is important in every business location decision,” he said. “We need to make sure we work closely with our education partners across the county to ensure we are providing the opportunities and curriculum needed for the future.”

And while big cities can offer a lot of amenities and inducements for entrepreneurs and start-ups, the increase in work-from-home opportunities that came as a result of the Covid-19 pandemic makes smaller communities attractive options for new businesses.

“Covid showed us how important quality of life and quality of education contributed to relocation decisions,” he said. “Having 46 miles of coastline is a contributing factor in that decision, especially for remote workers that could have chosen anywhere to live.”

In Palm Coast, economic development manager Craig McKinney said being near a large city can make smaller communities more competitive in development opportunities.

“It absolutely makes a smaller city more competitive,” he said. “Smaller communities can effectively position themselves by having an inventory of sites or existing buildings that assist a company’s speed to market. Smaller cities can also successfully position themselves bu having a well-organized plan to support potential companies’ workforce needs by working closely with the local and regional educational institutions producing the area’s workforce.”

McKinney said Palm Coast’s location gives the city a strategic advantage in attracting new business development.

“First, I-95 cuts right through the city,” he said. “It’s a strategic advantage that many communities in the U.S. will never have. Centered between Jacksonville, Daytona and the Space Coast and its proximity to Orlando puts the city in a great position to attract economic development opportunities.”