Image by: ‘Scratch’
By Michael Sterling
Major metropolitan cities are thriving. Businesses have set up camp there hoping to widen their market and to expand their growth. The urban market can have significant influence on Middle America since most of the media is planted within these booming cities.
Starting up a business in the urban market can be a smart move. It will come come full circle most of the time in ways you never thought possible. The population of the cities itself can create more potential for word of mouth marketing and expansion. In order to take advantage of these opportunities, you need to find your way in.
The Urban Market
The Urban Market is changing. In the last 30 years, small-towners have flocked to big cities in herds, creating more start up companies that hope to snag their business. What people fail to realize is that more giant companies are putting new locations within smaller towns, turning their giant corporations into seemingly “local chains” which will create wider client loyalty.
Plus, big cities attract tourists. When more tourists visit big cities, they try to offer more attractions for them to help their economy. Be it, restaurants with waiters who sing or an entire shopping district. Often times, the locals are overlooked. Yet, the locals to these big cities are what defines the landscape of the culture.
By gearing your business to this particular market, you are giving yourself a better chance at thriving. The secret to a successful business is customer loyalty. A business will never grow if every customer comes only once, you need to get them to come again and again. Tourists leave – the locals are there indefinitely. These are the people you want to target. Every city has a culture. Study it, and build on that principal if you want to survive.
Taxes and Costs in Urban Cities
Taxes can be a big deal when it comes to starting up in a big city. Dallas and Fort Worth made the list of the top 20 least expensive cities in 2012. Dallas has no personal income tax, occupation tax or wage tax; and both cities have very low costs when it comes to property tax, sales tax, business licence fees and utilities.
Creating your headquarters in cities like these can benefit your company for the long haul. Companies like AT&T and Southwest Airlines set up shop in Dallas, but their not the only ones. Nearly 80% of the businesses in Dallas are technically small businesses and employ almost 40% of the workforce.
Partnering With Other Urban Businesses
By combing forces with other small businesses inside a big city, you can double the exposure of your company. Not to mention, give yourself more opportunities to promote and sell your business. One example is CoatChex. Derek Pacque was a senior at Indiana University when he came up with the idea of starting a small coat checking business.
Pacque went to various bars and clubs within the city, hired a few of his friends, and started checking coats for their patrons – giving the businesses 10% – 30% of it’s revenue, at $2 – $3 a coat. In the first six months, he received $50,000 in revenue. He later expanded his business to other bars and clubs.
Eventually, he had a business partner and created CoatChex, which now checks the coat of major events, charging $45,000 per event. By seeing that his college town wore a lot of coats during the winter, by seeing the need for his kind of business, and by using other small businesses for his own growth, Pacque created a thriving business – and made his niche in the urban market.
Take Advantage of a Big City’s Cash Flow
Every city attracts attention from many venture capitalists, and they are all at various amounts. Depending on the city’s potential – which is based on geography, population, and culture – you might be able to get a lot of money for your company. Seattle, for instance, got $623 million of funding into it’s start ups last year.
Amazon, Microsoft, and the world famous Starbucks have gotten their start in Seattle and reaped the awards. The University of Washington also give $1 billion worth of research funding into the city and invests in researchers and projects which show true potential, not only that but UW gives a certain select number of start up companies access to it’s Facility – free with office and lab space.