Chris Strader and his family settled in the Oregon city of Hood River more than 20 years ago, drawn by its small-town lifestyle, good schools and energetic outdoors scene. A few years later, he learned it’s also a great place to start a business.
Windsurfers and kayakers flock to Hood River — a town in the Columbia River Gorge — and, in the winter, snowboarders and cross-country skiers. The city and surrounding region are dotted with farms, tourist spots and a growing number of wine and craft-beer businesses. Strader and his wife opened Hood River Jewelers 14 years ago in the city’s historic downtown.
Hood River draws a mix of tourists and locals that benefits all businesses, he says.
“We’ve been able to escape the economic downturn for a variety of reasons,” Strader tells NerdWallet. “One of the reasons is, there’s a good base to the economy. There’s farming, some light manufacturing and other high-tech businesses as well as everything else we do.”
That economic diversity describes Oregon, whose corporate citizens include athletic brand Nike and automotive retailer Lithia Motors.
To determine the best places to start a business in the Pacific Northwest state, NerdWallet examined communities with at least 5,000 people and more than 500 businesses ranging in size from sole proprietorships to big companies. We analyzed a community’s business climate and local economic health based on U.S. Census data.
Business climate: We looked at a community’s average revenue, percentage of businesses with paid employees and the number of businesses per 100 people. Most small businesses in the U.S. are sole proprietorships, which means they don’t have paid employees.
Local economic health: In this category, we looked at three factors in each community, including the median annual income, the median annual housing costs and the unemployment rate.
In Oregon, the unemployment rate was 5.4% in March, matching the nation’s rate, according to the Bureau of Labor Statistics. The state also has no sales tax.
Portland provides a boost. Five of the top cities are within a 20-mile radius of Portland, the largest city in the state. Known for its many breweries and coffee (sorry, Seattle), the city also boasts a huge tech community. Easy highway access around the Portland metro area provides a transportation hub for manufacturing and trade industries.
Tourism is a key driver. Five of Oregon’s top cities have access to beaches, major waterways such as the Columbia River and attractions including mountain ranges and parks. Tourism provides major business opportunities for entrepreneurs.
Best places to start a business in Oregon
This city less than 20 miles from Portland boasts the highest average revenue per business, at $3.4 million. The community counts Xerox Corp., aerospace company Rockwell Collins and Sysco Food Service among employers based there. Such large companies provide business opportunities for entrepreneurs. Successful businesses include Abella Italian Kitchen, a restaurant opened by a husband-and-wife team, and delivery service Hart Courier. The Wilsonville Area Chamber of Commerce has an online tool to help businesses get started or grow. Wilsonville Economic Development also provides business resources and incentives.
2. Hood River
The city’s unemployment rate, at 3.6%, is far below the state average and is the lowest among our top 10. Hood River has about 17 businesses per 100 residents, the highest rate in our top 10. The city has a vibrant downtown whose businesses include Gorge Surf Shop and Full Sail Brew Pub. Adds Mike Glover, executive director of the Hood River County Chamber of Commerce: “There is a pretty good range of types of businesses that you could start here and have a fairly good chance of success.”
3. West Haven-Sylvan
This small community is just five miles west of Portland. Businesses here rack up an impressive $2.5 million a year in revenue on average. West Haven-Sylvan has an educated population and a higher-than-average median household income.
A southern suburb of Portland, Tualatin has a robust manufacturing and retail trade base. Major employers include a local hospital; Lam Research, a semiconductor equipment company; and Precision Wire Components. Tualatin Commons, the city’s downtown, serves as the community gathering place with retail shops, restaurants and a free summer concert series. Businesses can join the Tualatin Chamber of Commerce, which provides a small-business toolbox for new businesses. The chamber also has an “economic gardening” program that works with a consultant to help businesses grow.
This coastal city, southwest of Salem, calls itself the Dungeness Crab Capital of the World. Newport’s coastal setting and beaches draw visitors from across the state. Its distinct downtown, known as the Deco District, includes a fishing port and numerous unique shops, such as The Kite Company, a family business. Downtown businesses can join the City Center Newport Association, which provides a business directory and sponsors events. The Greater Newport Chamber of Commerce also provides business assistance.
Just south of Beaverton, Tigard has a revitalized downtown. Tigard’s City Center Development Agency recently approved a $26-million mixed-use residential and commercial project. Downtown businesses include glass-blowing studio Live Laugh Love Glass and Tigard Wine Crafters, where visitors can make their own wine. Businesses can join the Tigard Area Chamber of Commerce, which offers members the Business Accelerator Program, a free growth-coaching series.
Situated on the Oregon coast, Seaside is the smallest community in our top 10. But nearly 50% of businesses in the coastal community have paid employees — the highest rate among our cities. Local employers and popular establishments include Nonni’s Italian Bistro. Seaside recently completed a long-term planning project called “Seaside 2034: Building a Bridge to Our Future” with help from the community. Businesses can join the Seaside Chamber of Commerce to attend networking events and be listed in the membership directory.
In the northeast section of the state, Pendleton is centrally located among Portland; Boise, Idaho; and Spokane, Washington, and has an affordable cost of living. The city’s median monthly housing cost — $745 — is the lowest among our top 10 cities. Pendleton boasts several tourist attractions, including the Pendleton Round-Up, one of the largest rodeos in the world, and the Wildhorse Resort & Casino on the Umatilla Indian Reservation. Local businesses include the Pendleton Woolen Mill, built in 1895 and operated by its namesake wool maker and retailer based in Portland. Businesses can join the Pendleton Chamber of Commerce for referrals and attend memberships events.
Film buffs may recognize the city at the mouth of the Columbia River. It served as a backdrop for movies including “The Goonies” and “Kindergarten Cop.” The distinction helps fuel the local tourism industry. The city’s major employers include the Coast Guard, paper company Georgia-Pacific and timberland company Weyerhaeuser. Hopping local businesses include ice cream shop Frite & Scoop and Lucy’s Books. Businesses can join the Astoria Warrenton Chamber of Commerce to attend networking events and get listed on its business directory.
10. Lake Oswego
The city, less than 10 miles south of Portland, has several business districts, including Kruse Way, which has more than 2 million square feet of office space. The city also has a strong lakefront downtown shopping area. Local businesses that have made a name for themselves include Blue Moon Coffee and Mascola’s Salon. Businesses can join the Lake Oswego Chamber of Commerce for weekly networking events and advertising opportunities. There’s also the Lake Grove Business Association for marketing and promotion.
|Rank||City||Population||Number of businesses||Average revenue per business||Percentage of businesses with paid employees||Businesses per 100 people||Unemployment rate||Overall score|
NerdWallet analyzed 79 cities in Oregon with 500 or more businesses and a population over 5,000. 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 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.
Updates: An earlier version of this article misstated the geographical location of Pendleton. A link in earlier versions of the methodology has been changed.
Image of Hood River, Oregon, via iStock.