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Buffalo Shoots up in National Small-Business Rankings

Business First - by G. Scott Thomas

Monday, April 11, 2011

 Western New York has risen dramatically in the latest national rankings of small-business vitality.

The Buffalo area is No. 29 in the standings of 100 major metropolitan areas, as rated by The Business Journals, the online arm of Business First’s parent company, American City Business Journals Inc.

That’s a sharp upswing from a year ago, when Buffalo was 80th. (Click here to see the full national standings.)

The rankings are based on a six-part formula that rewards markets that have prosperous economies, are expanding rapidly, and are densely packed with small businesses. (It defines a small business as any private-sector employer with 99 or fewer employees.)

The Buffalo area actually enjoyed a slight increase in its number of small businesses between 2007 and 2008, the latest period for which official statistics are available. Only nine of the 100 markets posted gains.

The local area lost 2.9 percent of its jobs between 2005 and 2010, another of the study’s key indicators. But even that decline worked in Buffalo’s favor, since two-thirds of the nation’s major metros suffered sharper declines.

Austin finished first in the small-business rankings for the second straight year, thanks to its outstanding records in three statistical categories that have a direct impact on small-business activity:

• Population: The Austin area added 286,000 residents between 2004 and 2009, an increase of 20.2 percent. The only metro to grow faster was Raleigh at 22.8 percent.

• Employment: Austin’s job base expanded by 9.3 percent between 2005 and 2010, the third-fastest upswing in the nation.

• Small-business growth: The number of small businesses grew by 1.5 percent in Austin between 2007 and 2008, the latest period covered by official statistics. No other market did better than 0.6 percent.

Oklahoma City is second in the current standings, followed by Charleston, S.C., Charlotte and Seattle.

At the very bottom of the rankings is Modesto, Calif., which lost 3.4 percent of its small businesses between 2007 and 2008 -- and 11.3 percent of its jobs between 2005 and 2010.

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