The 10 Worst U.S. Cities to Start a Business

NEW YORK (TheStreet) -- Living ain't always easy in Silicon Valley -- especially for entrepreneurs, surprisingly enough. In fact, California may be among the least favorable places to undertake your next entrepreneurial endeavor.

The Golden State is home to some of the worst cities to start a business in the United States, according to a study from WalletHub, a provider of tools and information to help consumers and small business owners make better financial decisions and save money.

Researchers used 13 key metrics to analyze the relative startup opportunities that exist in the 150 most populated cities in the United States. Criteria include the number of small businesses per capita, access to finance, employee availability, office space costs and workforce education level.

The coasts are home to the most challenging cities to start a business. Newark, N.J., ranks as the worst business environment, and Scottsdale, Ariz., falls last in access to resources.

Office space is most costly in San Francisco, New York, Washington, D.C., Jersey City, N.J., and Glendale, Calif. Financing is especially challenging in Arizona -- specifically, Phoenix, Mesa, Chandler and Glendale -- as well as in Mobile, Ala.

If you're looking for a place to start your next business venture, these are 10 U.S. cities you may want to avoid, counting down to the worst. And if you need to find a good place to start a business, check out this list.

10. Anaheim, Calif.

Anaheim may provide a great home for Mickey, Minnie and all of their friends at Disneyland, but it may not be where you want to build a start-up. WalletHub ranks the city 131 in access to resources and 118 in business environment.

With a population of about 345,000 people and a 6.6% unemployment rate, Anaheim's median household income is $59,165 -- slightly below the state average of $61,094. Less than a quarter of the population has a bachelor's degree or higher, though three quarters of Anaheim residents have graduated from high school.

9. San Jose, Calif.

Often referred to as the capital of Silicon Valley, San Jose is the home of tech giants eBay (EBAY) and Adobe (ADBE). It is also one of the nation's most expensive cities to live in, with the cost of living there nearly 50% above the U.S. average.

Total compensation costs for private industry workers increased 4.8% in the San Jose metropolitan area in 2014, more than double the 2.3% nationwide increase. Unemployment in the city, which has a population of about one million, is relatively low, at just 4.2%. Those who live in San Jose are paid well above the state average, with the median household income in the city being $81,829.

8. Santa Ana, Calif.

WalletHub's research ranks Santa Ana's workforce as the least educated in America. According to the United States Census Bureau, just over half the city's population has graduated from high school, and only 11% hold college degrees.

One Santa Ana company, Corinthian Colleges (COCOQ), closed its doors in April and shut down 28 ground campuses -- a move that doesn't bode well for the city's workforce or its students.

7. Oakland, Calif.

Like San Jose, Oakland, Calif., is one of the country's most expensive cities to live in. The cost of living in Oakland, the home of the Athletics, Raiders and Golden State Warriors, is 36% higher than the national average, and housing expenses are 116% above the U.S. norm.

Oakland's unemployment rate is 4.2%, and its population is well educated, with 38% of people living in the city holding a bachelor's degree or higher.

6. Ontario, Calif.

Thirty-five miles east of downtown Los Angeles, Ontario has a 6.5% unemployment rate, and according to WalletHub, is the home of one of the least-educated workforces in the United States. U.S. Census Bureau data shows that while about 70% of the city's population has a high school diploma, just 13% have finished college.

Ontario isn't just difficult for entrepreneurs -- it's less than ideal for job seekers, as well. According to a separate WalletHub report, Ontario ranks 115 out of 150 in a list of the best and worst cities to find a job.

5. Fremont, Calif.

Fremont is the home of the principal production facility of Tesla Motors (TSLA), which is one of the city's top employers. It is also the city with the highest annual income, according to WalletHub, and ranks second-to-last in access to resources.

More than 90% of Fremont's population has a high school diploma, and over half the city's residents have a bachelor's degree or higher. The median household income is $101,535, nearly double the state average.

4. Yonkers, N.Y.

Employee availability is a major problem in Yonkers, which WalletHub ranks last in the category. Located just two miles north of Manhattan and directly bordering the Bronx, it may be because Yonkers residents are going to New York City to work instead of staying in their own town.

Yonkers has a population of about 200,000 people, and the city's homeownership rate is 47.4%. Its median household income is $59,195, just slightly above the state norm of $58,003.

3. Garden Grove, Calif.

Situated about 35 miles south of Los Angeles, Garden Grove has a population of 175,000. About 70% of the city's dwellers have high school degrees, but only 18% have finished college. The median household income is $59,648, and the homeownership rate is 55.8%.

WalletHub ranks the city low in both business climate and access to resources.

2. Jersey City, N.J.

Jersey City ranks just a notch above Yonkers in employee availability at 149. It also has the most expensive office spaces in America.

The home of more than 250,000 people, Jersey City is the second most populous city in New Jersey and has a 6.0% unemployment rate. It is part of the New York metropolitan area, and 42% of its population holds a bachelor's degree or higher. The homeownership rate in the city is 30%, and median household income is $58,206, compared to the state median of $71,629.

1. Newark, N.J.

Identified by WalletHub as the worst city in the United States to start a business, Newark has low employee availability and a poor overall business environment. It is New Jersey's most populous city, and as of March 2015, has an unemployment rate of 6.4%. Newark's homeownership rate is 22.7%, and its median household income is $33,960.

The city has pushed back against its ranking as the worst place to do business, and Newark Community Economic Development Corporation CEO Otis Rolley told CNBC it is a "baseless claim." The city is participating in the New Jersey Urban Enterprise Zone Program, which seeks to benefit businesses through reduced retail sales taxes, financial assistance and subsidized unemployment insurance, among other mechanisms.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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