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South Carolina has often been recognized as one of the most business-friendly states in the nation.
The state’s Department of Commerce promotes small-business initiatives to help entrepreneurs set up shop. These initiatives include a variety of state and local small-business grants and other incentive programs — a recognition that new businesses boost the state’s economy by creating jobs, raising revenue and promoting growth of cities.
Incentives for businesses
In South Carolina, business incentives are found on the state and local level and many, called statutory incentives, are awarded to all existing or new businesses that meet a certain criteria. Some incentives include:
Job tax credit. Offered to companies that create new jobs.
No state property tax. Local property taxes still apply.
No local income tax. State income tax still applies.
No sales tax on manufacturing machinery, industrial power or materials for finished products.
No wholesale tax.
Additionally, the state offers discretionary business incentives, which are awarded for performance or on a case-by-case basis.
Finding a pro-business environment is not the only thing that determines if a business prospers. Choosing the right place to set up shop can also have lasting impact on the success of a business. Where a business locates will determine costs, access to markets, growth opportunities and the health of a business.
[For more information on how to start a small business, check out NerdWallet’s small business guide.]
Where are the best places to start a business in South Carolina?
To find the best places to start a business in South Carolina, NerdWallet examined communities with populations over 7,000 and more than 500 businesses. These businesses range in size from sole proprietorships to large companies. We used six variables in two categories for our analysis.
Business climate. We looked at average revenue of businesses, percentage of businesses with paid employees and the number of businesses per 100 people. A higher measure for each variable indicates a more business-friendly environment.
A majority of businesses in the U.S. — and in South Carolina — are made up one person and don’t have paid employees.
Local economic health. We looked at annual median income, annual median housing costs and unemployment rates for each community. We analyzed income and housing costs, so areas with high median incomes and low housing costs scored higher. We examined the unemployment rate to see whether a community’s economy supports business success. A lower unemployment rate scored higher.
Manufacturing is big in South Carolina. The state is home to a variety of manufacturing companies, ranging from automotive to pharmaceuticals. Manufacturing makes up 42.3% of business revenue in South Carolina.
Tourism is important. Three locations that made it to the top of our list — Myrtle Beach, Beaufort and Georgetown — are known for strong tourism economies.
Greenville County stands out. Three cities in Greenville County — Greenville, Mauldin and Greer — made our top 10 list. Greenville County has taken action to boost local economies and the business climate.
Best places to start a business in South Carolina
This city sits near the foothills of the Blue Ridge Mountains and is home to over 8,000 residents. Just seven miles from Clemson University, Seneca lies in Oconee County and hosts an eclectic mix of restaurants and boutiques. In addition, the county’s Oconee Economic Alliance and Oconee Chamber of Commerce promote small-business development by helping owners lower costs. Of the places analyzed, Seneca has the highest percentage of businesses with paid employees. In addition, businesses in Seneca make $600,000 more than the average South Carolina business.
The state’s sixth-largest city lands near the top of our list. With average revenue of $1,874,514, Greenville businesses make twice as much as the average business in South Carolina. In addition, a large percentage of Greenville businesses have paid employees. It is home to large corporations, such as General Electric and Lockheed, but the city is also just as friendly to existing and growing small businesses. The city’s Department of Economic Development offers small-business grants and loans, and Greenville Chamber of Commerce offers resources to help improve business conditions.
3. Myrtle Beach
The city, known for its soft sandy beaches and subtropical climate, attracts over 14 million visitors during the tourist season. Myrtle Beach caters to this influx with the most businesses per 100 people in state, which is four times the national average. One business, Myrtle Beach Watersports, offers a variety of water activities, from parasailing to Jet Ski dolphin-watching tours. To help businesses, Myrtle Beach Regional Economic Development Corp. and Myrtle Beach Area Chamber of Commerce offer a variety of business incentives and development programs.
This city is the site of the only BMW automotive manufacturing facility in North America. Greer has grown 54% from 2000 to 2013, and now it’s home to a young and diverse population. Small businesses benefit from its growing population and through the efforts of organizations, such as Greater Greer Chamber of Commerce and Greer Development Corp., which helps owners of specialty shops and restaurants. Businesses in Greer have high average revenues of $2,184,227, which is 139% more than the average business in South Carolina.
This beautiful city on the Atlantic Coast is recognized for its scenery and history. Beaufort has been designated a National Historic Landmark and tourists visit the Lowcountry destination for its historic district, galleries, fine dining and shops. Bay Street, Beaufort’s commercial hub, hosts local businesses, including Breakwater Restaurant and Bar, which features a contemporary approach to traditional Southern cuisine. In addition, Beaufort Regional Chamber of Commerce offers initiatives to support economic and community development.
This waterfront community that’s known for its rich history and charm benefits from its close proximity to Myrtle Beach. Georgetown has a vibrant commercial district, filled with specialty shops and restaurants, such as Rice Paddy, which has served generations of Georgetown residents and visitors. Low housing costs make Georgetown an ideal location to help keep business costs low. In addition, the Georgetown Business Association and Georgetown County Chamber of Commerce help the city remain a destination for visitors and promote business health.
Orangeburg, also known as the Garden City, is 37 miles southeast of Columbia, the state’s capital. One of the city’s major industries is manufacturing, including Kimlor Mills Inc., which designs and makes bedding and other home textiles. Orangeburg businesses have above-average revenue and a significant percentage of them have paid employees. In addition, the Orangeburg County Chamber of Commerce and the Orangeburg County Development Commission offer incentives to promote a business-friendly environment and attract future businesses.
8. North Charleston
This city is the third largest in South Carolina and the location of major manufacturing companies, including a Boeing Co. plant for the 787 Dreamliner. It is also the state’s leader in retail sales, generating over $6 billion each year. Businesses in North Charleston make average revenues of $2,252,910. The Charleston Metro Chamber of Commerce supports a healthy business climate, while the City of North Charleston provides business initiatives to help finance new and growing businesses.
9. Fort Mill
This small, suburban community has been making strong efforts to stimulate economic growth and improve its business climate. Situated at the border of the Carolinas, Fort Mill businesses benefit from its small-town charm as well as opportunities in neighboring Charlotte, North Carolina. Fort Mill’s York County Regional Chamber of Commerce annually generates industry and business development worth an average of $200 million. A Charlotte-based financial advisory company, LPL Financial, which was attracted by incentives and grants that North Carolina could not match, plans to relocate about 1,000 employees to Fort Mill.
This city, a few miles from Greenville, offers an atmosphere that’s particularly inviting for businesses. Along with the Greater Mauldin Chamber of Commerce, the city partners with Greenville Area Development Corp. to create a hospitable and pro-business environment for new entrepreneurs and existing businesses. One success story, Moonstruck Specialty, a boutique selling women’s apparel, also donates to local schools and charities. Mauldin has an unemployment rate of 4.5%, and businesses here make average revenues of $1,817,520 annually.
We analyzed places with a population over 7,000 and with 500 or more business, but we excluded places that lacked data. We calculated the score for each location with the following criteria:
Business climate, 65% of the overall score, is based on three metrics from the U.S. Census Bureau’s Survey of Business Owners.
Average revenue of businesses is 20% of the score. A higher average contributed to a higher score.
Percentage of businesses with paid employees is 25% of the score. A higher percentage contributed to a higher score.
Businesses per 100 people is 20% of the score. A higher number contributed to a higher score.
Local economic health, 35% of the overall score, is based on three metrics from the U.S. Census Bureau’s American Community Survey.
Median annual income is 10% of the score. A higher median income contributed to a higher score.
Median annual housing costs are 10% of the score. Lower median costs contributed to a higher score.
Unemployment rate for residents over 16 years old is 15% of the score. A lower rate contributed to a higher score.
Update: A link in earlier versions of the methodology has been changed.
Myrtle Beach, South Carolina, image via iStock.