Are you thinking of starting a business in California? Check out California’s most prominent business hubs, including Hollywood and Silicon Valley.
California stands out as a major economic center in the United States, with manufacturing and agricultural industries thriving alongside tech and media hotspots like Hollywood and Silicon Valley. If California were a country, it would have the fifth-largest economy in the world, and the state has over four million small businesses that employ roughly 50 percent of its workforce. We’ve compiled a list of California’s most significant business hubs for those who might be interested in starting a business in the state where dreams come true.
Los Angeles
Los Angeles, the home of Hollywood and iconic coastlines, has a growing population of 3.9 million. Its dynamic market and thriving economy offer ample opportunities for entrepreneurs. As a well-established financial hub that attracts significant investments and forex trading activity, its economic appeal is only set to expand further.
Aside from having a large consumer base, Los Angeles has many startup accelerators, co-working spaces, and incubators, which provide resources to new businesses. It is also a good spot for international trade activities, like the Long Beach port complex, which carries the nation’s top cargo.
San Diego
San Diego is a dense city in California, with a population of 1.4 million people. It stands out as a thriving startup ecosystem with various networking groups like Startup San Diego, Cool Companies, and SD Tech Hub. There are many collaborative spaces, such as shared offices, meeting rooms, and even virtual environments, where different entrepreneurs and business owners meet. These spaces allow for teamwork and offer chances to meet other entrepreneurs in San Diego.
The city is close to Los Angeles and San Francisco, providing convenient proximity to business opportunities like a large pool of potential customers, better infrastructure, and skilled talent. Unlike other large cities in California, San Diego has low business license fees and no utility user taxes. It attracts a lot of startup capital and investments and has an affordable cost of living that entrepreneurs would appreciate.
San Francisco
The tech scene is thriving in San Francisco, having seen the rise of companies like Lyft, Airbnb, Uber, and Square. San Francisco is among the prominent cities in California, offering unique business opportunities as the city is full of early adopters. This means that the population is known to be open to new products and services, making it a good place for startups to test their ideas. It offers many networking opportunities through its regular schedule of tech conferences, the San Francisco Chamber of Commerce, other networking events, and a highly talented workforce in the tech sector.
There’s also high access to funding since many venture capitalists and angel investors call the city home. While San Francisco offers ease in starting your business, it’s a competitive landscape. There is a high concentration of tech companies, a high cost of living, and expensive houses, which might not be suitable for new entrepreneurs with limited capital.
Silicon Valley
Located in the San Francisco Bay Area, Silicon Valley is where all the entrepreneurs want to go. It’s globally known as a lucrative and innovative place to start a new business, thanks to the abundant sources of venture capital. Silicon Valley also offers abundant talent and networking opportunities; as long as your business idea stands out, you can attract funding from venture capitalists.
Silicon Valley is home to many top businesses, such as Apple, Intel, eBay, Meta, HP, Cisco, Alphabet, Adobe, Oracle, Google, Chevron, Netflix, and Visa. This means startups have proximity to major tech companies and potential customers.
Santa Monica
Santa Monica is best known as a key employment hub in Los Angeles, as it is home to a thriving business community. The city has a robust and diversified local economy, high foot traffic, and an affluent demographic, all of which make it a good place to start a business.
Santa Monica has a population of 93,000 and is a growing tech hub that would be advantageous for startups. It also has a prime location in front of the beach, with popular areas like Third Street Promenade attracting locals and tourists. However, Santa Monica might not be ideal for most startups because it’s one of the most expensive cities in which to operate a business.
San Jose
San Jose is the third-largest city in California and has a long history of innovation. According to the 2024 Biz2Credit Top Cities for Small Business Study, which was based on financial data like annual revenue, credit score, and age of business, San Jose is the top city for a small business.
It plays host to approximately 66,000 businesses and 439,000 workers in sectors ranging from manufacturing and healthcare to software and technology. Many high-tech companies are located in San Jose, and since it is close to the Bay Area, it offers easy access to talent, especially people with degrees in science, technology, engineering, and math.
Sacramento
Right at the center of California, Sacramento is another prime business hub that offers easy access to other startup cities. One of the major benefits of starting a business here is that it’s more affordable than in other places like San Francisco, San Jose, Los Angeles, and Silicon Valley. Sacramento is where major industries like agriculture, healthcare, food manufacturing, and medicine dominate and thrive.
The California city offers resources to businesses since it’s the state capital, and there is a vibrant startup community. Before starting a business in Sacramento, you must consider essential factors like getting an Employer Tax ID and registering with the California State Employment Development Department.
Starting a Business in California
California has major business hubs that make it stand out from other states in the USA, with some of the cities known for manufacturing, entertainment, and technology. Starting your journey in entrepreneurship can be difficult, but many of these cities in California offer wide benefits, investment opportunities, and networking to new business owners. In any of these cities, you can take your first step towards a new business.
