Do you want to know the best place to start a profitable business in California? If YES, here are 10 best cities to start a business in California and succeed.

Important Statistics for California

California is a state that can boast of a GDP of $2.797 trillion (2017), GDP growth of 3.0 percent (2017), and GDP per capita of $71,209 (2017). California has a 13.3 percent (absolute) 19.0 percent (relative) of population below poverty line and an effective Labor force of 19,286,476 (December 2017) with an Unemployment rate of 4.2 percent (Jan. 2019).

Demographic Analysis

California is a state in the Pacific Region of the United States with Sacramento as the capital of the state. Interestingly, California is the most populous state in the United States of America with a population of approximately 39.6 million residents. Of course, California can boast of having the third-largest landmass by area.

Economic Analysis

California with a $2.9 trillion economy is larger than that of any other state, larger than those of Texas and Florida combined, and the largest sub-national economy in the world. If it were a country, California would be the 5th largest economy in the world (larger than the United Kingdom, France, or India), and the 36th most populous as of 2017.

10 Best Cities in California to Start a Business Successfully

If you are interested in starting a business in California, especially if you want to start with small business, here are some of the small cities that you can start your business. These cities have what it takes to support the growth of small businesses and of course other businesses; they are known as business – friendly cities for small businesses.

In no particular order they are;

  1. San Francisco, California

The Greater Los Angeles Area and the San Francisco Bay Area in California are the nation’s second and fifth most populous urban regions, with 18.7 million and 8.8 million residents respectively. The Greater Los Angeles Area and the San Francisco Bay Area are the nation’s second- and third-largest urban economies ($1.253 trillion and $878 billion respectively as of 2017), after the New York metropolitan area.

The San Francisco Bay Area PSA had the nation’s highest GDP per capita in 2017 ($99,000), and is home to three of the world’s ten largest companies by market capitalization and four of the world’s ten richest people.

Interestingly, some of the highest income counties in California are Marin County and San Francisco County, which both can boast of per capita personal incomes of over $100,000, and are 2 of the top 12 highest-income counties in the United States. As a matter of fact, some coastal cities include some of the wealthiest per-capita areas in the U.S., notably in the San Francisco Bay Area and the Greater Los Angeles Area.

San Francisco is a business – friendly city and some of the notable businesses that started and grew there are Twitter, Uber, Square, AirBnb, Gap, Levi Strauss, Lyft, and Yelp. As a matter of fact, the boom in the tech industry gave San Francisco the leverage to becoming one of the strongest business communities in the United States of America.

Please be informed that the business environment in San Francisco is not restricted to tech related companies alone, it supports other small businesses from other industries too.

  1. Santa Monica, California

Santa Monica, a city that is located on the western end of Los Angeles is the famous beach town of Santa Monica. The city has a strong economy that is supported by a good number of companies such as Hulu, Lionsgate Films, RAND Corp, Toms Shoes, and Universal Music.

  1. Palo Alto, California

Palo Alto is city that is located in the heart of the home of techies – the Silicon Valley, the city is the host of loads of startups and technology companies such as HP, Ideo, Nest, Palantir, Tesla, and VMWare. It might interest you to know that Facebook operated from a house in Palo Alto when the company first relocated to California. Aside from Facebook, some other companies like Google, Paypal, and Pinterest operated from Palo Alto during their early days.

Palo Alto’s entrepreneurial community is ably supported by Stanford University which is notable for attracting and graduating some of the best business inclined people with great startup ideas to the community every year. Indeed, Palo Alto is a city that gives the needed support that a growing business would need; it is an oven for entrepreneurship.

  1. Yorba Linda, California

Yorba Linda, another small business friendly town is located just 37 miles from downtown Los Angeles—in Orange County. The fact that Yorba Linda has the 2nd highest median income of any town ($121,102) and a very high owner-occupied housing percentage (82.61 percent) makes this city a good place to start and grow your business irrespective of the industry you choose to start a business in.

In addition to that, the economic health of Yorba Linda provides a great opportunity for small business owners most especially if you choose to start a service – based business.

  1. Redwood City, California

Redwood City, a town with a resident population of 85,288 is yet another highly suitable town that an aspiring entrepreneur who intend starting a business in California should consider. Redwood City is located between San Jose and San Francisco.

The two leading businesses in Redwood City are Electronic Arts and Oracle, records shows that these companies employ approximately over 9,000 people which translate to more than 10 percent of the population of the community.

  1. Torrance, California

Another ideal city that any business person or aspiring entrepreneur who intends starting a business in California should consider is Torrance. Torrance is a coastal Los Angeles County town that performed well across board. Available statistics shows that Torrance ranks 3rd for average business revenue and 2nd for percentage of firms with paid employees (30.85 percent of firms had paid employees).

Please note that in Torrance most businesses leverage on the economies of scales that comes from the manufacturing facilities of top – rated companies like Alcoa Fasteners, Exxon, Honda, and Robinson Helicopters that are located in the town.

  1. Thousand Oaks, California

Thousand Oaks is no doubt another small business friendly community that an aspiring entrepreneur with great startup idea should consider. The town is located 35 miles northwest of Los Angeles in Ventura County.

Interestingly, Thousand Oaks can boast of having the 3rd-highest median household income ($108,322) and the 2nd highest owner-occupied housing percentage (69.8 percent) in the state of California. Companies like Amgen, General Dynamics, Verizon, and Volkswagen have their corporate headquarters and regional offices in Thousand Oaks.

The fact that there are several corporate headquarters and regional offices in the town means that there are opportunities for small businesses to leverage on.

  1. San Clemente, California

San Clemente is yet another super cool town that is small business friendly that an entrepreneur with startup idea should consider if he or she intends starting a business in California. San Clemente is located down the coast from Yorba Linda in another Orange County city. Interestingly, San Clemente can boast of having a median household income of ($100,187), unemployment of (4.2 percent), and owner-occupied housing percentage of (66.48 percent).

Fortune 500 Companies in California

The fact that there are a good number of Fortune 500 companies in California shows that it is a state that a good business idea can be started and nurtured to become a world – class corporation.

Interestingly, Los Angeles – California can boast of having three of the Fortune 500 companies headquarters within Los Angeles. The companies are engineering and construction giant Aecom, ranking 161st; real estate services firm CBRE Group Inc., ranking 214th; and Reliance Steel & Aluminum Co., which ranked 320th.

These are the California companies that are on the list of Fortune 500 Companies:

  1. Apple is listed as number 3 on list
  2. McKesson is number 5 on the list
  3. Chevron is number 19 on the list
  4. Wells Fargo is number 25 on the list
  5. Alphabet is number 27 on the list
  6. Intel is number 47 on the list
  7. Disney is number 52 on the list
  8. Hewlett Packard Enterprise is number 59 on the list
  9. Cisco Systems is number 60 on the list
  10. HP is number 61 on the list
  11. Oracle is number 81 on the list
  12. Gilead Sciences is number 92 on the list
  13. Facebook is number 98 on the list
  14. Qualcomm is number 119 on the list
  15. Amgen is number 123 on the list
  16. Molina Healthcare is number 156 on the list
  17. PG&E is number 157 on the list
  18. Aecom is number 161 on the list
  19. Gap is number 178 on the list
  20. Visa is number 187 on the list
  21. Synnex is number 198 on the list
  22. CBRE Group is number 214 on the list
  23. Western Digital is number 217 on the list
  24. Ross Stores is number 219 on the list
  25. Farmers Insurance Exchange is number 222 on the list
  26. Edison International is number 235 on the list
  27. Core-Mark Holding is number 247 on the list
  28. PayPal Holdings is number 264 on the list
  29. Applied Materials is number 265 on the list
  30. Sempra Energy is number 280 on the list
  31. Pacific Life is number 302 on the list
  32. eBay is number 310 on the list
  33. Netflix is number 314 on the list
  34. Reliance Steel & Aluminum is number 320 on the list
  35. Salesforce.com is number 326 on the list
  36. Live Nation Entertainment is number 330 on the list
  37. Charles Schwab is number 357 on the list
  38. Tesla is number 383 on the list
  39. Nvidia is number 387 on the list
  40. A-Mark Precious Metals is number 395 on the list
  41. Franklin Resources is number 405 on the list
  42. Activision Blizzard is number 406 on the list
  43. Sanmina is number 414 on the list
  44. Avery Dennison is number 430 on the list
  45. Lam Research is number 440 on the list
  46. Adobe Systems is number 443 on the list
  47. Clorox is number 453 on the list
  48. First American Financial is number 464 on the list
  49. Symantec is number 465 on the list
  50. NetApp is number 468 on the list
  51. Mattel is number 474 on the list
  52. Robert Half International is number 493 on the list
  53. Yahoo is number 498 on the list

In conclusion,

If you are still looking for reasons why you should start a business in California, you need not look further. With 53 California-based companies listed amongst Fortune 500 Companies, shows that if you start a business in California, your business will be in safe hands simply because of the reputation the state has when it comes to the growth of business.