Best Places to Start a Business in Indiana

Small Business
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Best Places to Start a Business in Indiana

 

Indiana’s economy is fueled by the automotive, manufacturing and agricultural industries, but the state is also a diverse one that encourages entrepreneurship, particularly among its younger residents, according to Robert Schuttler, professor of business and economics at Marian University in Indianapolis.

“Over the past 10 years, I’ve seen a marked increase in entrepreneurship as a professional pursuit among students,” Schuttler says. “Indiana is a good place for business creativity and development.”

Indiana’s economy grew twice as fast as the rest of the country in 2010 and put up similar results in the next three years, according to a report by the Indiana Business Review. The Hoosier State offers businesses numerous resources, including 10 Small Business Development Centers throughout the state, the Indiana Chamber of Commerce, the Business Ownership Initiative, the Indiana Economic Development Corp. and more.

NerdWallet’s analysis

NerdWallet analyzed 99 places in Indiana, each with a population of at least 5,000 and at least 500 businesses. We calculated the overall score for every location based on the city’s business climate and economic health using data from the U.S. Census Bureau. Learn more about our methodology at the end of this article.

Key takeaways

Top cities are highly entrepreneurial. The top 10 cities to start a business in Indiana have an average of 10.47 businesses per 100 people, above the statewide average of 8.48, which means business owners are more concentrated in these cities.

Lower housing costs. On average, the top 10 cities have a median monthly housing cost of $727, which is lower than the statewide average median monthly cost of $819.

City size doesn’t matter. Cities ranking in the top 10 have average populations of 10,967, while 7,245 people, on average, live in the top three cities. These population figures are far lower than the statewide average of 36,524.

Best places to start a business in Indiana

1. Bluffton

The northeastern Indiana city of 9,616 has the second-highest average revenue per business on the list, and its 1,003 businesses have an average revenue of $5.06 million. Bluffton residents benefit from affordable housing: With a median monthly housing cost of $571, Bluffton ranked as the second-most affordable place for housing of all of the locations we analyzed. The city also has a high percentage of businesses with paid employees (36.39%) and businesses per 100 people (10.43). Local businesses are served by the Wells County Chamber of Commerce, which provides workforce development, networking and marketing opportunities through numerous events and programs throughout the year. The ISBDC, Indiana Small Business Development Center, has a nearby office in Fort Wayne.

2. Monticello

With a population of just 5,367, Monticello is the smallest city on the list, but it has the third-highest number of businesses per 100 people (14.27) and at 47.13%, the second-highest percentage of businesses with paid employees. Monticello is home to Lake Shafer, Lake Freeman and the Indiana Beach Amusement Resort, making the city an attractive tourist destination. Small businesses are supported by the Greater Monticello Chamber of Commerce and Visitors Bureau.

3. Batesville

Located 46 miles west of Cincinnati and 67 miles southeast of Indianapolis, the city of Batesville takes the third spot on the list with the second-highest number of businesses per 100 people (14.99) and the second-lowest unemployment rate of 2.9%, which is well below both the state and the national unemployment rates. Residents also enjoy a median annual income of $44,820, which is the highest in the top 10. Batesville is home to two major employers: the Batesville Casket Co. and Hill-Rom, a health care equipment company. The Batesville Area Chamber of Commerce represents over 300 local businesses and provides programs and activities for its members.

4. Auburn

Auburn takes the fourth spot on our list due to its high percentage of businesses with paid employees (50.84%, which tops our list), a high average revenue per business ($1.43 million) and reasonable median monthly housing costs of $701. Auburn businesses are served by the DeKalb Chamber Partnership, which works to promote and enhance local business through networking, marketing, training and advocacy, and the Downtown Auburn Business Association, which sponsors and supports numerous community events throughout the year in downtown Auburn.

5. Warsaw

Warsaw ranks as the fifth-best place to start a business in Indiana, and the average revenue per business of $4.72 million is the third highest in our study. Although it had an 8.4% unemployment rate in the 2013 American Community Survey from the U.S. Census Bureau, the city benefits from 10.02 businesses per 100 people, a high number on our list. Warsaw says it is the “Orthopedic Manufacturing Capital of the World” as the city is home to three major orthopedics companies: Zimmer, Biomet and DePuy. Other major employers include Tecomet, Medtronic and the Pierceton-based Paragon Medical. Warsaw businesses are served by the Kosciusko Chamber of Commerce, whose members enjoy a variety of benefits.

6. Decatur

Decatur doesn’t dominate in any one category, but puts in a solid performance across the board: 42.11% of businesses have paid employees, businesses have a high average revenue of $2.33 million and residents benefit from a low cost of living, with median monthly housing costs of $683. Decatur is home to the Adams Memorial Hospital, which opened a new facility in 2005 and employs 500 people, and Lingenfelter Performance Engineering, which designs and sells high-performance automobile parts. Local businesses can turn to the Decatur Chamber of Commerce for networking and advertising opportunities.

7. Clarksville

Located on the border of Indiana and Kentucky, Clarksville has the largest population of the top 10 cities in our survey at 21,734. The city scores well in three categories: average revenue per business ($1.95 million), percentage of businesses with paid employees (45.16%) and its unemployment rate of 4.2%. Here, One Southern Indiana serves as both a chamber of commerce and economic development center for local businesses and aims to provide clients with “business intelligence, advocacy, connections and innovation solutions” to support local business expansion. Major employers in the nearby city of Louisville include Ford, General Electric, Humana Inc. and KentuckyOne Health.

8. Rensselaer

Rensselaer, with the second-lowest population in the top 10, scores well due to its low monthly housing costs of $660, low unemployment rate of 3.2% and the high percentage of businesses at 38.01% with paid employees. The city is home to Saint Joseph’s College, a private Catholic liberal arts college. The closest ISBDC office is in West Lafayette.

9. Jasper

Jasper benefits from high average revenue per business at $2.28 million, and low monthly housing costs of $740 and an unemployment rate at 3.7%. The city is 78 miles west of Louisville, Kentucky, and 120 miles south of downtown Indianapolis. Major employers include Memorial Hospital and Health Care Center and Kimball International. ISBDC offices are about an hour away in Evansville and Bedford. The Jasper Chamber of Commerce offers workshops, seminars and networking opportunities for small businesses.

10. Angola

Angola has a high number of businesses per 100 people (12.44) and one of the lowest median monthly housing costs on the list at $671. The city is home to Trine University, a private institution with undergraduate enrollment of about 2,000 and a main campus that covers 450 acres. The Angola Area Chamber of Commerce provides local business owners with networking and marketing opportunities, education and information resources, plus other benefits and services.

Best places to start a business in Indiana

 

Rank City Population Number of businesses Average revenue per business Businesses with paid employees Businesses per 100 people Unemployment rate Score
1 Bluffton 9,616 1,003 $5,062,548 36.39% 10.43 5.7% 60.86
2 Monticello 5,367 766 $825,359 47.13% 14.27 7.0% 58.39
3 Batesville 6,753 1,012 $1,409,563 32.31% 14.99 2.9% 58.19
4 Auburn 12,973 1,068 $1,435,983 50.84% 8.23 5.9% 55.99
5 Warsaw 13,907 1,393 $4,722,841 39.48% 10.02 8.4% 55.43
6 Decatur 9,821 919 $2,331,135 42.11% 9.36 5.7% 53.90
7 Clarksville 21,734 1,548 $1,953,005 45.16% 7.12 4.2% 52.40
8 Rensselaer 5,812 513 $1,166,986 38.01% 8.83 3.2% 50.63
9 Jasper 15,088 1,359 $2,288,064 34.07% 9.01 3.7% 50.39
10 Angola 8,600 1,070 $1,203,661 39.44% 12.44 7.8% 49.47
11 Madison 12,032 1,567 $1,461,119 31.84% 13.02 6.0% 49.40
12 Munster 23,445 2,312 $1,054,078 35.94% 9.86 4.9% 46.99
13 Princeton 8,620 882 $630,088 38.78% 10.23 6.0% 46.99
14 Columbus 44,978 3,529 $2,174,134 34.20% 7.85 4.8% 46.99
15 Boonville 6,238 584 $664,731 36.47% 9.36 3.8% 46.81
16 Valparaiso 31,491 3,090 $1,173,761 34.63% 9.81 5.0% 46.79
17 Mishawaka 48,079 3,428 $1,825,093 41.83% 7.13 6.8% 45.95
18 Avon 12,944 1,621 $822,926 27.76% 12.52 3.4% 45.94
19 Carmel 81,756 8,684 $1,265,700 27.11% 10.62 3.8% 45.83
20 Merrillville 35,404 3,117 $1,235,436 43.98% 8.8 7.7% 45.82
21 Chesterton 13,514 1,309 $1,126,286 38.20% 9.69 6.9% 45.62
22 Linton 5,381 539 $316,427 32.10% 10.02 3.8% 45.58
23 Crawfordsville 15,979 1,380 $1,897,975 38.55% 8.64 7.2% 45.49
24 Evansville 119,677 8,645 $2,222,619 35.81% 7.22 5.3% 45.13
25 Bedford 13,407 2,123 $565,942 21.15% 15.84 5.6% 44.73
26 Highland 23,544 2,132 $785,609 35.55% 9.06 5.2% 44.70
27 Seymour 18,400 1,763 $1,888,109 32.67% 9.58 6.2% 44.62
28 Speedway 11,886 896 $3,741,968 31.25% 7.54 7.6% 44.34
29 Franklin 24,021 1,483 $1,310,099 39.51% 6.17 4.7% 44.18
30 Marion 29,822 2,098 $1,186,240 39.99% 7.04 6.3% 43.83
31 Greensburg 11,823 1,036 $2,157,888 34.17% 8.76 7.4% 43.42
32 Rochester 6,181 705 $808,209 26.24% 11.41 4.9% 42.92
33 Plainfield 28,653 1,901 $3,072,128 29.20% 6.63 4.8% 42.73
34 Zionsville 23,794 1,789 $525,191 30.74% 7.52 2.5% 42.70
35 New Haven 15,131 1,218 $2,489,357 29.64% 8.05 6.5% 42.60
36 Goshen 31,722 2,067 $2,848,777 35.07% 6.52 7.0% 42.26
37 Nappanee 6,502 828 $1,609,543 28.99% 12.73 8.8% 42.08
38 Rushville 6,351 691 $1,068,849 29.52% 10.88 6.3% 42.06
39 Mooresville 9,432 735 $968,815 37.01% 7.79 5.8% 42.03
40 Wabash 10,598 1,038 $1,331,118 37.28% 9.79 9.3% 41.70
41 Lafayette 69,181 5,402 $1,958,622 34.75% 7.81 7.0% 41.63
42 Beech Grove 14,204 954 $1,877,668 36.90% 6.72 6.9% 41.57
43 Shelbyville 18,989 1,301 $1,760,793 39.43% 6.85 8.3% 40.87
44 Sellersburg 6,147 771 $541,878 21.66% 12.54 4.4% 40.84
45 East Chicago 29,584 1,237 $6,300,196 26.35% 4.18 8.8% 40.38
46 Martinsville 11,856 1,597 $376,810 28.37% 13.47 7.8% 40.33
47 Richmond 36,727 2,386 $1,802,361 36.17% 6.5 7.3% 40.27
48 Terre Haute 61,002 4,462 $1,315,053 32.86% 7.31 5.7% 40.14
49 Vincennes 18,287 1,240 $1,098,585 31.94% 6.78 4.5% 40.14
50 Huntington 17,330 1,044 $1,883,894 40.90% 6.02 8.7% 39.93
51 Brownsburg 22,276 2,282 $583,535 23.66% 10.24 3.4% 39.79
52 Bloomington 81,115 6,012 $1,019,071 30.51% 7.41 4.5% 39.51
53 Brazil 8,055 589 $546,182 39.90% 7.31 7.6% 39.40
54 Elkhart 51,273 3,982 $2,339,891 36.21% 7.77 9.6% 39.11
55 Kendallville 10,027 664 $2,488,873 32.68% 6.62 8.1% 38.85
56 Michigan City 31,369 2,045 $1,858,498 37.11% 6.52 8.5% 38.77
57 Washington 11,659 587 $966,273 35.09% 5.03 5.0% 38.71
58 Schererville 29,096 2,887 $562,154 24.84% 9.92 4.9% 38.64
59 Scottsburg 6,720 703 $842,515 36.70% 10.46 10.1% 38.55
60 Plymouth 10,040 1,091 $1,280,250 33.36% 10.87 10.3% 38.40
61 Columbia City 8,896 741 $1,258,178 31.17% 8.33 7.1% 38.38
62 Fort Wayne 254,435 20,136 $1,746,620 29.05% 7.91 7.2% 37.99
63 Hobart 28,894 1,880 $1,067,011 35.64% 6.51 6.8% 37.55
64 West Lafayette 30,137 1,534 $1,077,728 29.14% 5.09 3.8% 37.37
65 Dyer 16,336 1,559 $455,293 24.50% 9.54 4.5% 37.20
66 North Vernon 6,582 901 $770,752 26.75% 13.69 10.1% 37.20
67 Lebanon 15,654 1,226 $854,986 25.61% 7.83 4.1% 37.19
68 Crown Point 27,904 2,464 $648,999 26.01% 8.83 5.3% 36.92
69 Greencastle 10,309 889 $845,665 21.82% 8.62 3.6% 36.87
70 Greenfield 20,841 1,564 $1,568,563 28.32% 7.5 6.4% 36.76
71 La Porte 21,937 1,530 $1,275,936 35.56% 6.97 8.2% 36.65
72 Frankfort 16,504 1,098 $1,913,954 33.42% 6.65 7.9% 36.55
73 Greenwood 51,600 4,902 $698,349 25.56% 9.5 5.8% 36.27
74 Peru 11,274 926 $906,240 34.56% 8.21 9.0% 35.92
75 Connersville 13,305 1,006 $1,183,482 36.48% 7.56 9.9% 35.81
76 Logansport 18,040 1,475 $1,165,419 32.27% 8.18 8.6% 35.13
77 Kokomo 55,589 4,122 $944,107 30.25% 7.42 7.5% 35.10
78 Fishers 78,927 6,248 $1,093,520 21.53% 7.92 3.8% 34.62
79 Danville 9,133 821 $504,441 23.63% 8.99 4.8% 34.58
80 Noblesville 54,686 5,283 $503,384 19.44% 9.66 3.8% 34.36
81 Muncie 69,989 3,739 $1,124,270 37.50% 5.34 8.7% 33.99
82 Jeffersonville 45,206 2,887 $1,736,034 25.39% 6.39 6.2% 33.74
83 Griffith 16,821 1,009 $694,949 30.23% 6 5.6% 33.65
84 Anderson 56,200 2,853 $930,363 38.87% 5.08 8.9% 33.51
85 St. John 15,160 1,214 $344,122 21.83% 8.01 3.6% 33.39
86 Indianapolis 828,841 63,794 $2,003,077 25.82% 7.7 8.1% 33.35
87 Granger 29,325 2,880 $333,789 15.45% 9.82 4.0% 33.19
88 Portage 36,752 1,995 $1,736,277 26.22% 5.43 6.6% 31.99
89 South Bend 100,863 7,377 $1,400,925 30.22% 7.31 10.0% 30.74
90 New Castle 17,948 1,162 $1,356,442 29.69% 6.47 9.2% 30.58
91 Lowell 9,296 763 $505,751 25.82% 8.21 7.1% 29.94
92 Ellettsville 6,312 520 $310,433 19.81% 8.24 5.1% 29.31
93 Hammond 80,122 4,270 $1,706,136 27.80% 5.33 8.5% 28.57
94 Elwood 8,624 789 $458,365 19.01% 9.15 7.3% 28.28
95 Cedar Lake 11,574 564 $167,112 31.21% 4.87 6.7% 28.20
96 Lawrence 46,304 3,570 $469,736 24.68% 7.71 8.0% 27.13
97 Charlestown 7,710 531 $199,343 24.67% 6.89 7.4% 26.27
98 Gary 79,922 5,686 $1,340,460 15.72% 7.11 10.5% 18.65
99 Lake Station 12,474 527 $814,355 23.53% 4.22 11.0% 16.37

Methodology


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.

Experts talk Indiana as a place to do business


Robert Schuttler

Marian University


Kyle Anderson

Indiana University


NerdWallet staff writer Steve Nicastro contributed to this article.

Update: A link in earlier versions of the methodology has been changed.


Indiana image via iStock.