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With plenty of incentives for both startups and existing businesses and a state corporate income tax rate among the lowest in the nation at 6%, Virginia’s business-friendly policies appear to be paying off.
The state’s unemployment rate was 4.8% as of July, compared to the national average of 5.3%, and 193,000 jobs have been created in Virginia since the 2008 recession, according to the Bureau of Labor Statistics. Meanwhile, average hourly earnings of private-sector workers have risen by 1.9% over the past year, outpacing a nationwide increase of 1.3%, according to the U.S. Congress Joint Economic Committee.
Business incentives include state tax credits for recycling old equipment; economic and infrastructure development grants; reimbursement for recruiting and training services; and economic development loan funds and grants.
To pinpoint where small business are thriving in Virginia, NerdWallet examined 112 communities with populations of at least 5,000.
Entrepreneurs looking to start a small business in Virginia will find resources in NerdWallet’s Small Business Guide. For financing, take a look at NerdWallet’s comparison of small-business loans for a variety of needs.
Strong local economy. The top 10 places have an average unemployment rate of 3.9%, well below the state and national average, and nine of the top 10 have median incomes above the national median income of $43,880, according to the most recent data from the U.S. Census Bureau.
Washington, D.C., suburbs dominate. Six communities in the top 10 list are located within 50 miles of the nation’s capital: Tysons Corner, Fairfax, Warrenton, Falls Church, Vienna and Merrifield. Of those six places, five are in or directly adjacent to Fairfax County.
Popular spot for corporate headquarters. Many large companies call Fairfax County home, including Booksfree.com, Capital One Financial, Freddie Mac and Northrop Grumman. Meanwhile, the town of Vienna is home to Navy Federal Credit Union.
In our analysis of 112 places in Virginia with populations of at least 5,000, we considered six metrics in two categories — business environment and the local economy — to assess each location. For more details, see the methodology section at the end of this article.
Best places to start a business in Virginia
1. Tysons Corner
The unincorporated Tysons Corner area serves as Fairfax County’s central business district; it’s home to 26.4 million square feet of office space. Tysons Corner’s businesses have an average annual revenue of $11.4 million, which is tops on our list and three times higher than any other place in our survey. Nearly 45% of Tysons Corner businesses have paid employees, and its 23.9 businesses per 100 people ranks second highest among all Virginia communities. Top employers include the Boeing Co., Booz Allen Hamilton and Hilton Worldwide. The area is also home to Tysons Corner Center, the largest shopping mall in Virginia.
The city of Fairfax has 25.3 businesses per 100 people, the highest number in the state, and its 4% unemployment rate is lower than both the state and national average. Among top employers are the city itself and Fairfax Nursing Center. Local businesses are served by the Central Fairfax Chamber of Commerce, which offers monthly networking events, educational workshops, marketing opportunities and leadership training.
The town of Warrenton, about an hour west of D.C. near Shenandoah National Park, has 21.2 businesses per 100 people, fourth highest among Virginia communities, and 40.1% of its businesses have paid employees. The Greater Warrenton Chamber of Commerce offers a business assistance team whose mission is to “support and educate local businesses towards sustained profitability and success.” The chamber provides free professional guidance, expertise and resources to its members.
The town of Abingdon has one of the lowest median monthly housing costs on our list, at $663, and has 19 businesses per 100 people. Nestled in the Blue Ridge Highlands region of southwestern Virginia, Abingdon is an outdoor lover’s dream. The town is home to or near several historic and recreational trails, including the 34-mile Virginia Creeper Trail and the Appalachian Trail. Local businesses are served by the Washington County Virginia Chamber of Commerce.
5. Falls Church
Falls Church, a 20-minute drive from downtown D.C., cracks our top 10 because of its high percentage of businesses with paid employees (44%), its 13.2 businesses per 100 people and its $91,932 median annual income. Although median monthly annual housing costs are high at $2,149, the city’s unemployment rate is a low 3.8%. Local businesses can turn to the Falls Church Chamber of Commerce for networking and promotional opportunities.
Forest, near Lynchburg, has a high number of businesses per 100 people (11.1) and low median monthly housing costs of $943. More than 45% of its businesses have paid employees, the fifth-highest rate in our survey. Forest is home to Poplar Forest, which was Thomas Jefferson’s plantation house and now operates as a historic home and museum. Local businesses are supported by the Bedford Area Chamber of Commerce.
Located 17 miles west of downtown D.C., the town of Vienna has 16.3 businesses per 100 people, a high median annual income of $83,125, and a 2.1% unemployment rate, the second lowest of all the communities in our survey. The town’s ranking is hampered a bit by high median monthly housing costs of $2,254. The top three employers in the area include Navy Federal Credit Union, Fairfax County Public Schools and Contemporary Electrical Services Inc. The Vienna Business Association offers networking and promotion for its members.
The Merrifield area of Fairfax County ranks in our top 10 thanks in part to its high percentage of businesses with paid employees (43.7%) and its $75,569 median annual income. The Mosaic District, a collection of boutiques, restaurants and a movie cineplex, has made Merrifield a retail and entertainment destination in Fairfax County.
Hollins, a suburb of Roanoke, ranks high in part because its businesses bring in an average annual revenue of $2.3 million each, and 51.2% of its businesses have paid employees, which is tops in the state. Hollins also has an unemployment rate of 3.3%, well below the state and national average. Hollins is home to Hollins University, a private women’s college with undergraduate enrollment of 550.
Ashland, 18 miles north of Richmond, is the smallest place in our top 10, with a population of 7,231. But the town benefits from a high average annual revenue of $2.25 million per business, an impressive 45.4% of businesses with paid employees and a low median monthly housing cost of $902. Ashland is home to Randolph-Macon College, a private liberal arts and sciences college with total enrollment of nearly 1,400 undergraduates. Popular restaurants include O’Bank’s Cafe & Grill, Virginia Barbeque, Homemades by Suzanne and Thai Gourmet Restaurant.
NerdWallet analyzed 112 places in Virginia with a population of 5,000 or more. We excluded 11 places with less than 500 businesses and 64 places that were missing data from the U.S. Census Bureau’s Survey of Business Owners.
The overall score for each community was calculated using these 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 annual revenue of businesses is 20% of the overall score. A higher average contributed to a higher score.
Percentage of businesses with paid employees is 25% of the overall score. A higher percentage contributed to a higher score.
Businesses per 100 people is 20% of the overall 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 overall score. A higher median income contributed to a higher score.
Median annual housing costs are 10% of the overall score. Lower median costs contributed to a higher score.
Unemployment rate for residents 16 and older is 15% of the overall score. A lower rate contributed to a higher score.
Former NerdWallet staff writer Steve Nicastro contributed to this article.
Image of Tysons Corner, Virginia, via iStock.