Cost of Living and Office Space Push WeHo Low in Ranking of Cities for Small Businesses

The high cost of living and high cost of office space are two reasons West Hollywood has ended up near the bottom in a ranking of the best and worst small cities in the United States in which to start a small business.

The ranking was conducted by WalletHub, a personal finance website. Its analysts looked at 1,261 cities with populations of between 25,000 and 100,000 residents (West Hollywood’s is roughly 35,000). It rated those cities according to their business environment, the access they provide local businesses to the resources they need and the cost of doing business in the city.

West Hollywood ranked high in the education level of its workers and in the number of startups per 100,000 residents, where it came in at 146 among the 1,261 cities surveyed. Those factors are part of the overall access to resources part of the survey.

But the city was tied with Beverly Hills and Santa Monica in ranking a very low 1,228 in the “affordability of office space” category.

WeHo was in the bottom 20% of cities in the survey when it came to the average annual revenue of small businesses, which WalletHub calculated as $2.17 million a year in WeHo. The city was ranked 943 in the average annual revenue category.

The average growth in the number of small businesses in WeHo was 3.6% according to the survey, which ranked West Hollywood at No. 334. However, WeHo ranked very low (828) in average growth of business revenues, for which the survey showed a decline of 1.8%.

Other negatives affected West Hollywood’s ranking were the lack of accessibility to business financing, the slow growth in the city of the working age population (defined as those ages 16 to 64), and the fact that the city, heavily dependent on the service industry, does not have a lot of different business types.

West Hollywood ranked in the mid-range among factors such as labor costs and corporate taxes.

West Hollywood’s overall ranking was similar to that of other small cities nearby. For example, Beverly Hills ranked 1,123; Culver City was ranked 1,122; South Pasadena was ranked 1,139 and Santa Monica ranked 834.

The only significant variants were the high ratings of Beverly Hills and Santa Monica when it comes to access to business resources. Santa Monica ranked 36 and Beverly Hills 42. West Hollywood ranked a low 369.

The survey defined access to business resources as availability of financing, number of available workers, the education level of residents and the growth in number of residents ages 16 to 64.

Data used in the analysis was collected from the U.S. Census Bureau, Bureau of Labor Statistics, Federal Deposit Insurance Corporation, AreaVibes, Yelp, Indeed, U.S. News & World Report, Tax Foundation and LoopNet.

West Hollywood’s City Council and City Hall staffers are in discussion about ways to make it easier to operate a small business, including streamlining the event permitting process, changing parking requirements and making it easier to get access to business regulation information.

  1. I can’t believe that the Chamber of Commerce has not responded to set this obviously erroneous evaluation straight(so to speak). This is just another example of the fake news liberal press from the east coast and the west coast and various east coast – like west coast press – they’re all pinko fake commie bastards writing their pinko fascist commie fake news trying to detract from hard working ‘common-man’ Americans. These guys probably paid for the wiretapping of my presidents sacred residence in Trump Tower and fund Wikileaks.

    Grrr – just Grrr!

    I am sorry, but I just couldn’t resist a little early morning humor. Everyone who lives here knows how expensive it is – that’s why most city hall employees live elsewhere, even with the ‘healthy’ salaries Weho pays its employees. What amazes me is that people decry Whole Foods’ prices and no one mentions Gelson’s, which makes Whole foods look like a discount house. 5 little Victor Benes(sp?) mini cookies – $10.00 Meats and produce will really shock you – it did me when I looked, but did not shop.

  2. Small businesses are the enemy of the West Hollywood Industrial Complex aka WEHO City Hall.

    Where the bureaucrats and politicians survive on white male, run large corporations – developers, hotels, office buildings, major box stores and big companies.

    The tax bucks keep the “creative city” going with lobbyists and their clients filling the campaign coffers of old WEHO political hacks that won’t retire.

    We all know these guys: the John sisters!

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