PERSPECTIVE - Surprise! Connecticut is a Great Place for Small Business

by Caroline Goldstein When you think of Connecticut, you might think of fall foliage, Gilmore Girls, big casinos, Mark Twain, Mystic Pizza, Yale University, country clubs, and commuters (and, if you’re Senator Chris Murphy, pizza to rival New York’s City’s). You might not think of Connecticut as a great state to start a small business—but you absolutely should.

Local business is incredibly important in Connecticut: Small businesses make up 97% of Connecticut’s total businesses, and employ almost half of the state’s private workforce. And Connecticut takes small-business promotion seriously, offering a range of state-specific small business financing programs and Connecticut tax incentives that encourage business investment.

What does all that boil down to? Connecticut is a promising state in which to start a small business.  Out of 169 towns and cities in the state, we determined the five best cities in Connecticut to start a small business - cities that are ideal for entrepreneurs looking to start a new venture: Stamford, Norwalk, West Hartford, Danbury, and Fairfield.

Our methodology consisted of data culled almost exclusively from the U.S. Census and the Connecticut Department of Labor. We used additional data from AreaVibes, Sperling’s Best Places, Data USA, and reports from town resource centers.

Then, we weighed 10 metrics, which indicate the overall economic health of each town, their business climates, and their relative affordability. Next, we came up with a score for each town—a city’s highest possible score was 5. We also considered qualitative data like access to small business resources, overall quality of life, and economic and commercial development initiatives in each town to come up with a more holistic definition of the “best.”

The breakdown: Median gross rent (5% of score); Percentage of people with a bachelor’s degree or higher (5%); Total number of firms (5%); Unemployment rate (10%); Median household income (10%); Recent job growth (10%); Overall cost of living, compared to the state average (10%); Growth in median household income (15%); Total retail sales and total retail sales per capita (15%) and Projected job growth, compared to the national average (15%).

The top five communities are:

Stamford (3.45) - Stamford has long been home to some of the world’s biggest corporations, including nine Fortune 1000 companies. In particular, though, over the past year-plus Stamford has seen a “string of economic coups,” especially in the corporate market. Henkel are opening their North American headquarters in Stamford, ITV America just signed a lease for a TV production studio, Greenwich-based hedge fund Tudor Investment plans to relocate to Stamford this year, and WWE, Conair, and RBS have headquarters here, too.

Despite its reputation as a nerve center for Connecticut’s big business, the City of Stamford’s resources for small business owners are robust. That includes a comprehensive guide to starting your business in Stamford, help with finding locations for your small business, information on registering your business, and a guide to financial advantages including available grants and funding options. Business owners can also benefit from Stamford’s tax incentive programs, which includes a program for businesses that develop and reuse rehabilitated industrial areas.

Norwalk (3.45) - A few years back, Norwalk initiated a comprehensive economic development action plan. Included are efforts to “provide resources for start-ups, entrepreneurs and small businesses in Norwalk,” like free counseling programs, permit guidance and advocacy, information on funding, job-training programs, and quality-of-life initiatives to support local businesses and residents. Norwalk is small-business friendly, but its economy is boosted by big business, too. Major corporate headquarters in Norwalk include Pepperidge Farm, MetLife, Xerox, and GE Capital.

West Hartford (2.95) - In a recent presentation, West Hartford’s economic development officials showed that the community’s commercial districts are growing. Dozens of new small businesses—including restaurants (a total of 1,400 outdoor restaurant seats), cafes, retail, a new luxury boutique hotel, and other small firms—are opening this year, or are planning to open soon. Small businesses at 485 New Park, for example—one of West Hartford’s independent retail enclaves—include a comic book store, a vintage shop, a bakery, a photography studio, a boutique fitness studio, a kitchen and bath designer, an IT solutions company, and a brewery, among others. Similar growth patterns abound across the town, with small businesses dominating many of its commercial areas.

Danbury (2.75) - Danbury is dedicated to revitalizing its commercial centers, drawing new business opportunities, and supporting both new and established businesses. Recently, the town invested over $100 million in their Main Street shopping area. Other small business resources in Danbury include an Office of Business Advocacy, which helps small business owners establish and expand their businesses and oversees economic development programs. CityCenter is an organization of property owners, sponsors, businesses, and more that contribute to projects to revitalize the downtown commercial area and support new and existing ventures.

Fairfield (2.6) - Fairfield is home to Fortune 500 companies GE and Bigelow Tea, but it’s also a college town, with Fairfield University and Sacred Heart University in the vicinity. These stalwarts feed Fairfield’s economy and boost its spending population. But the town offers support and incentives to small business owners, too. Fairfield’s Micro-Enterprise Assistance Program, for instance, offers entrepreneurs and small business owners with “training, technical assistance, and start-up capital needed to create and sustain viable and productive small businesses in Fairfield.

***

Forbes ranked Connecticut #5 for quality of life in the country—which makes this small state attractive to city workers to raise their families, buy country homes, or move to entirely (and bring their spending power with them).  And, despite that extreme wealth and massive income gap, the overall cost of living and doing business in Connecticut is much lower than its’ neighboring New York City.

So, consider starting your small business in one of these high-growth, resource-rich towns—and, who knows, you might eventually join the state’s 16 resident billionaires. (Can’t hurt to dream.)

_____________________________

Caroline Goldstein is a small business and finance writer at Fundera, where a longer version of this column first appeared. Before joining Fundera, she received an MFA in Fiction from New York University. She loves finding creative ways to help entrepreneurs grow, and is a Connecticut native. Fundera is a funding marketplace and resource site for small businesses.