Best Places to Start a Business in Illinois

Small Business
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Best Places to Start a Business in Illinois

 

Mentoring and helping others come naturally to the people around Chicago.

So says Nick Rosa, founder and a managing director of Sandbox Industries, an incubator turned venture capital firm. Since founding Sandbox in Chicago in 2003, Rosa has worked with numerous entrepreneurs, and he’s not sure if it’s the tough Illinois winters that bring people together, but there’s an ethos of supporting others without a “what’s in it for me” attitude, he said.

Climate of collaboration

The collaborative spirit boosts the business climate, which is especially strong in the suburbs and small communities surrounding Chicago. Entrepreneurs’ attitudes toward business also helps, Rosa says.

“We’re more interested in commerce, business and revenue production than probably either coast that’s in this Internet world, where it’s important to grow rapidly without much regard to business models,” Rosa says.

With Chicago area businesses placing a greater focus on the fundamentals, he says, “some of the businesses we create seem to be more sustainable.” The state is home to major company headquarters, making it great for B2B companies, Rosa adds.

Illinois, especially Chicago, has a number of universities, which are a source of entrepreneurial talent. Many graduates used to relocate to the West Coast, but Rosa says more are choosing to stay in Illinois and start businesses.

NerdWallet’s analysis

NerdWallet analyzed 285 places in Illinois, each with a population of at least 5,000. 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

Chicago suburbs win. The 10 top places on our list are in northern Illinois, with all but one, Peru, clustered around Chicago. Almost all of the top spots are in suburban Chicago, located from 15 to 30 miles from downtown.

Smaller communities succeed. Five of the top 10 places on our list have populations under 10,000. The municipality with the largest population, Elk Grove Village, is home to just over 33,000 people.

Best places to start a business in Illinois

1. Oak Brook

Although Oak Brook has one of the smaller populations among the top 10, it has the second-highest number of businesses — and the highest number of businesses per 100 people by far (almost 43). That’s over 3,400 businesses total. It also has the highest median annual income of the top 10, at over $107,000. Oak Brook is home to the headquarters of McDonald’s, Ace Hardware, Blistex, TreeHouse Foods and other major corporations, in addition to Lions Club International. Local businesses are served by the Greater Oak Brook Economic Development Partnership, along with the Greater Oak Brook Chamber of Commerce.

2. Itasca

Itasca comes in with the highest-average revenue per business, at $8,827,217. This affordable suburb, where the median monthly housing cost is just under $1,500, is near O’Hare International Airport. Midas Inc., global office supply company Fellowes and insurance brokerage Arthur J. Gallagher & Co. are headquartered in Itasca. It’s also home to the Willy Wonka Candy Factory. The Itasca Chamber of Commerce supports local businesses through networking, seminars, community events and economic development opportunities. The GOA Regional Business Association is located in the community and offers networking, training and other support to businesses in over 80 communities in northeastern Illinois.

3. Lincolnshire

The village of Lincolnshire is an affluent Chicago suburb with a median annual income of over $103,000. Although many residents work outside the village, Lincolnshire has over 1,300 businesses. The Greater Lincolnshire Chamber of Commerce provides opportunities to local business owners, as does the Lincolnshire-based Lake County Partners, an economic development corporation that aims to attract and retain businesses in the area. The unemployment rate here is a low 3.8%.

4. Countryside

Countryside is the second-smallest town in the top 10 by population (a little fewer than 6,000 residents), but it has the second-highest number of businesses with paid employees (53%). The Countryside Business Association, a nonprofit, member-based organization, aims to foster a great business environment in the area and help local businesses connect with the community. Countryside, in Cook County, is one of eight communities that participate in the West Suburban Chamber of Commerce and Industry, another resource to help businesses collaborate and grow. Countryside is also the second-most affordable town among those in the top 10 spots, with a median monthly housing cost of $955.

5. Peru

Peru is the only city in the top 10 outside of the Chicago area — about 100 miles from the Windy City. Since it’s far from Chicago, housing is the most affordable of our top 10 places (the median monthly housing cost is $702). Peru also has the largest number of businesses with paid employees (61%). Peru and nearby LaSalle are in the Illinois Valley, and businesses in the region have access to resources and development opportunities through the Illinois Valley Area Chamber of Commerce and Economic Development.

6. Deerfield

About 25 miles north of Chicago, Deerfield is where Walgreens, Takeda Pharmaceuticals USA, the Baxter health care company and other large companies are headquartered. Deerfield businesses can access networking and growth opportunities through the DBR Chamber of Commerce, which also supports the communities of Bannockburn and Riverwoods. The average median income in Deerfield is the fourth highest of the top 10, at nearly $103,000.

7. Elk Grove Village

With over 33,000 residents, Elk Grove Village has the biggest population in the top 10, plus the largest number of businesses at nearly 5,500. The Illinois SBDC at Harper College in nearby Schaumburg offers free one-on-one business counseling, among other benefits, to entrepreneurs. Elk Grove Village also has its own Office of Business Development & Marketing to help retain and attract businesses.

8. Burr Ridge

In this well-to-do Chicago suburb, unemployment is second lowest of the top 10, at an impressive 2.7%. The median annual income is the second highest, just under $105,000. The quiet community about 19 miles southwest of Chicago’s downtown area has several major retail areas in addition to office and industrial parks. The village straddles the DuPage-Cook county line. Depending on where your business is, you can access resources through Choose DuPage or Cook County Bureau of Economic Development.

9. Northfield

Of all the top 10 places on our list, unemployment is lowest in Northfield — at 2.4%. It is also the community with the smallest population of the top 10, with just over 5,100 residents in 2013, according to census data. Northfield is one of six villages in the New Trier Township, but not all of the community is part of the township. Although this small upscale village is mostly residential, it is home to the headquarters of Kraft Foods and Stepan Co., a chemical company.

10. Lisle

Lisle has the second-largest population among our top 10, with over 22,000 residents, not to mention more than 2,600 businesses. Living here is more reasonable than many other places we analyzed, with a median monthly housing cost of $1,407. The College of DuPage Center for Entrepreneurship is located in the community and it offers training for businesses in marketing, government contracting, global expansion and more. Lisle aims to be very pro-business, and the Lisle Economic Development Commission helps make the area even more business friendly.

Best places to start a business in Illinois


 

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 Illinois as a place to do business


Faisal Rahman

Saint Xavier University


Al Gini

Loyola University Chicago


Gurram Gopal

Elmhurst College


Stephen N. Bretsen

Wheaton College

NerdWallet staff writer Emily Starbuck Crone contributed to this article.

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


Chicago, Illinois, image via iStock.