SMITH BRAIN TRUST -- When starting a business, not all locations are equal. Success or failure can depend on businesses per capita, accessible financing, annual income levels, average workday length, office space costs and workforce education levels. Christine Beckman, associate professor of management and organization at the University of Maryland’s Robert H. Smith School of Business, considers these factors for Wallethub’s Best Cities to Start a Business guide for 2015. Beckman tackles the following topics:
Location significance. "The city is important because it is the ecosystem in which you operate and is the network in which you are embedded. Here you will find organizations and other entrepreneurs who can be customers, collaborators and competitors. In an emerging industry in particular, you want to look at who are the anchor organizations (universities, government agencies, investors or a cluster of collaborating companies) that will set the tone for how organizations will work together and provide an infrastructure on which entrepreneurial success can be built."
Setting a foundation. “Choose your co-founders and early team members carefully. Look for people with complementary expertise and be clear about who does what early on. It's better to wait and hire a sales person with the right experience than to fill a spot with the wrong person. It feels impossible because you need people -- but it's worth it to wait for the right people.”
Best funding sources. "Friends, family, angels. It's easier to raise money when you can demonstrate early success, so those early dollars often come from those with close connections to the entrepreneur."
Additional external resources. "Public research organizations can serve as the anchors on which an entrepreneurial community can be built. An entrepreneurial community needs to be nurtured, and these types of organizations can serve that role."