Wednesday, February 11, 2004
Copyright © Las Vegas Review-Journal

Magazine: LV still stellar for startups

Valley's 'sex appeal,' diversity earn praise

Las Vegas ranks No. 3 among large metropolitan areas in which to start a business, according to a survey released Tuesday by Inc. magazine.

"Vegas has both sex appeal and also has managed to diversify its job base beyond tourism," Inc. Editor Ed Sussman said in a phone interview from New York. "Las Vegas would not have ranked as high as it did if it was just tourism. There's strong evidence that Las Vegas is creating jobs across multiple industries. It did very well in professional and business services."

Sustained growth in the Southeast and Midwest regions left former high-fliers such as New York, Boston and San Francisco among the 10 worst cities, the survey noted.

Florida, with its increasing number of young retirees re-entering the work force and educated workers fleeing higher-priced coastal regions, claimed six of the top 25 best U.S. cities for starting a business.

Inc. magazine, a leading publication for small- and medium-size businesses, will list the top cities in its March issue.

The list is based on an objective review of job growth data in 277 cities supplied by the federal government. Sustained job growth balanced among many industries was the leading indicator of an entrepreneurial hot spot.

Nevada, with its business-friendly regulatory environment and favorable tax structure, has been recognized in the past by MSN Business, Entrepreneur, Forbes-Milken, Cognetics and other sources as a good place to do business.

About 45,000 new businesses open every year in Nevada, said Scott Letourneau, chief executive officer of Nevada Corporate Planners.

Although many companies claim that saving taxes is a chief benefit to incorporating in Nevada, that's not the case for 70 percent to 95 percent of business owners, Letourneau said. Most of them still pay taxes in their state of operation.

What most business owners aren't aware of, he said, is that the biggest benefit to incorporating in Nevada is liability protection, protecting the board of directors from shareholder liability.

"Nevada is still the hardest state in the country to pierce your corporate veil. Nevada appears like an iron fortress to your creditors," Letourneau said.

Buoyed by its diverse mix of industries and relatively affordable housing climate, Atlanta recovered from the doldrums of the recession to become the top city for entrepreneurial growth.

"A region's overall affordability was the theme that united the cities atop this year's list," said Joel Kotkin, author of the article and senior fellow at Pepperdine University's Davenport Institute for Public Policy in Malibu, Calif.

"For that reason, cities with sprawling suburbs fared very well, often at the expense of more high-priced urban areas. This was reflected in the impressive showing by areas in the Midwest and Southeastern United States."

Inc.'s list of worst cities for entrepreneurs is littered with areas still reeling from the tech-sector implosion, such as San Jose, Calif., (Silicon Valley); San Francisco; New York; and Boston.

Regions that rely heavily on manufacturing, including Grand Rapids, Mich., Dayton, Ohio, and Rochester, N.Y., continue to be stung by the exodus of factory jobs overseas.