Small Cities Reap Big Rewards for Tech Startup CompaniesNovember 16, 2017
The tides are changing in the tech world. The startup revolution is shifting to a small town near you. Technology startup companies are moving away from the big, metropolitan cities and into small towns across America. Why? According to Small Business Trends, startup businesses tend to perform better in smaller towns for a variety of reasons.
Cost of Doing Business
For one, the cost of doing business can be dramatically lower in a small town. From finding a budget-friendly space to conduct business, to lower tax rates and fewer restrictions, small towns offer more opportunities for employers to stretch their dollars. Renting office space can be a company’s biggest expense, so finding an affordable space for your business to grow is important. It is easier to find affordable space in a small town than it is in a large metropolitan area where rent is much higher. Other issues affecting startups are high taxes and strict regulations in mega metros that often hinder growth and can make it hard for companies to get their businesses off the ground.
Employee Recruitment and Retention
When it comes to the challenge of recruiting and retaining qualified employees, small towns again have the advantage. One of the biggest factors for young professionals when choosing where to live and work is a city’s cost of living. Job seekers today place more value on work-life balance and moving somewhere with a high quality of life and a low cost of living. If a town can’t offer potential employees the lifestyle they seek, then they will be less likely to consider moving there, no matter the job. Small towns typically have more accessibility to affordable housing options and offer more purchasing power, dollar-for-dollar.
While large cities have the advantage of a growing population and a greater demand for young talent when it comes to recruiting qualified job seekers, companies in smaller towns often have higher retention rates. While the local talent pool may be smaller, companies can still be selective in choosing the right candidate for the job. Keeping that employee is the other part of the challenge. With a smaller job market and fewer competitors out there for businesses, it is less likely that other companies will poach employees. Employers can spend a lot of time and money training their employees, and the last thing they want is for their businesses to have a revolving door of employees coming and going.
Startup companies in small towns inherently face less competition in their area of business. Big cities are plagued with failed startups because, just when a company thinks they have cornered the market, another business comes in with the same idea. In a small town, a business can quickly become the industry expert in their community. Once a company has pioneered an area of development, it becomes much easier for them to network within the community and build trust among potential customers. Companies can then forge partnerships with other local businesses and remain at the forefront of their community’s development.
Technology Startups in Arkansas
When it comes to economic development in the technology sector, Arkansas is at the top of its game. With the third-lowest cost of living in the country and business incentives for technology-based companies, the state is bringing in companies from around the world and bringing in a skilled workforce to fill high-tech jobs. The state also provides companies with the resources they need to grow their business with entrepreneurial entities like the Arkansas Venture Center, Innovate Arkansas and the Arkansas Innovation Hub.
Growing tech companies like Elyxor, a team of software engineering specialists, chose to expand their business into Central Arkansas because they felt like they could build a strong relationship with the local community, and the state had a talented workforce that could meet the needs of their high-tech positions. CaseStack, a logistics and warehouse company, has a large presence in Fayetteville, Arkansas, where they launched a new technology division that is changing the retail landscape across the world.