Orlando is the best place in the nation to start a new business in 2023, according to WalletHub, a Miami-based finance website.
The ranking is based on metrics ranging from five-year business-survival rate to industry variety, presence of higher education institutions, prevalence of investors and more. Orlando was ranked No. 3 for the highest average growth in number of small businesses, but came in last (No. 100) for lowest availability of human capital.
Florida featured prominently on the overall national list of 100, with Jacksonville, Miami and Tampa right behind Orlando in the No. 2-4 spots, respectively.
What is it about Florida — and Orlando in particular — that makes it so ideal for startups?
University of Central Florida Assistant Professor Arthur Huang, who studies and writes about technology, hospitality and tourism, noted that the trend of Northern people moving to the South for better weather and quality of life plays a role. “As more customers start to gather here, new demand occurs.”
The region’s strong tourism sector also factors in, he said, with entrepreneurs coming to capitalize on these opportunities for profit. “Other than tourism, Orlando has a diversified economy. Lake Nona has the growing Medical City. There are more sports events and training activities happening here.”
All that motion can translate to business opportunity.
“I give a lot of credit to the higher education institutions," said one of the area’s most successful entrepreneurs, Salman Rehmetullah — co-founder of fintech unicorn Stax Payments. "We have UCF, Rollins College and Valencia College in town, and the University of Florida less than 100 miles away. That brings a vibrant, youthful population, a workforce looking for jobs in innovation.”
However, Rehmetullah said retaining middle management talent is an Orlando problem that needs to be solved: “I think we’ve historically struggled to keep managerial VPs here. People get high-paying job offers in the New Yorks, San Franciscos and Austins of the world. A $275,000 job as a VP in New York City compared to $130,000 here is hard to resist.”
Still, keeping talent here becomes more likely as Orlando becomes a center of activity, said Rehmetullah, and that’s going to get worked out over time. “Orlando is starting to figure out its identity. When I’ve looked at places where I want to go, I don't remember the tax grants I can get for choosing a location for my office. I remember the four bars I went out to, the three restaurants I went to and the activities I participated in.”
A compelling city scene should make Orlando stickier, but practical business support still matters. Retmullah said startup fundraising can be a challenge.
“We do have a great amount of angel investor stuff happening, but there’s not a ton of institutional funding. Whether it's the private equity or venture capital crowd, there are few people who will write checks north of $1 million.”
Orlando’s investors tend to get behind traditional opportunities, like real estate, but startup investing here is dwarfed by activity in other cities, like the ones Rehmetullah named as offering big salaries to middle management.
The VC investing momentum Orlando had has dwindled this year, according to a report by PitchBook. About $94 million in venture capital was invested into businesses in second-quarter 2023 — a 71% year-over-year drop from Q2 2022's $323 million invested.
One place Orlando shines is in the small business incubator sector, Huang pointed out.
All nine of UCF's business incubator locations in the region provide "broad entrepreneurial support, mentorship help with their operational model, some of the accounting support services, public relations support and mentorship,” said Rob Panepinto, UCF's senior strategic adviser and director of innovation districts, strategy and partnerships.
Start-up city metrics
WalletHub’s 19 key metrics fit into three main categories of local characteristics: business environment, access to resources and business costs.
Orlando came in second, 14th and 26th in those three big buckets, respectively, with a total score of 65.34 out of 100 earning the city the top overall spot.
Below are the 19 metrics and maximum possible score for each one:
Business environment – total points: 50
- Length of average work week (in hours): 6.25 Points
- Average growth in number of small businesses: 6.25
- Startups per capita: 6.25
- Average growth of business revenue: 6.25
- Five-year business-survival rate: 6.25
- Industry variety: 6.25
- Entrepreneurship index: 6.25
- Job growth (2021 vs. 2017): 6.25
Access to resources – total points: 25
- Financing accessibility: 3.57 Points
- Venture investment (amount) per capita: 3.57
- Prevalence of investors: 3.57
- Human-capital availability: 3.57
- Higher-education assets: 3.57
- Share of college-educated population: 3.57
- Working-age population growth: 3.57
Business costs – total points: 25
- Office-space affordability: 5 Points
- Labor costs: 10
- Corporate taxes: 5
- Cost of living: 5
Source: WalletHub
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