The Best City in Australia to Start Your Business

New Data: The Best City to Start a Business in Australia

Launching a small business is a big challenge. Location can vastly affect talent attraction, internet quality, affordability, and historical success rates of small businesses. We’ve analysed data from the 50 largest Australian cities across 18 metrics, scoring each on a 0-100 scale. Our findings reveal the best city for launching your business, aiding you in selecting the ideal location for your venture. So, let’s jump in!

Top 10 places to start a business in Australia

Surprisingly, Geelong secures the top spot as Australia’s top city for starting a business, surpassing Ballarat and Melbourne. Victorian cities dominate the top 10, with 6 entries, while Queensland follows closely behind with 4. Melbourne leads among capital cities, outperforming its rivals. Toowoomba claims the highest position in Queensland, ranking fourth overall. Notably, Sydney, Australia’s 2nd city, is absent from the top 10 list.

Government assistance packages. New Zealand will be rolling out a range of support packages and assistance aimed at reducing economic impacts on businesses due to COVID-19. It’s one of the largest in the world on a per capita basis and businesses are being urged to make full use of what is available to them. Let’s review the primary business support measures being rolled out.

The best place to start a business by region

New South Wales Queensland Victoria Northern Territory South Australia Western Australia Tasmania

Western Australia

It’s no surprise that Perth ranked first in Western Australia, with its talent pool and business landscape score significantly higher than any other Western Australian city. Bunbury is surprisingly second last in the state, despite being its second most populated city.

Interestingly, Kalgoorlie is the least populated Western Australian city examined, yet it ranks second overall in the state. It is catapulted to the top by scoring first overall in median income of all 50 cities analysed. Albany ranks last in Western Australia with the lowest talent pool and business landscape score.

Tasmania

Hobart ranks first in Tasmania with Launceston as a close second. Although Hobart has the worst cost of living score in Tasmania, it is the best of all capital cities when looking at the cost of living. Hobart scores excellently for childcare costs and commute costs compared to the other cities, bringing its cost of living score up. In fact, Hobart ranks third out of the eight Australian capital cities for the best city to start a business. All 3 large cities observed in Tasmania are among the most affordable, all of them ranking in the top 5 for cost of living scores comparing across all 50 cities.

New South Wales

Not surprisingly, Sydney achieved the highest overall score among the 15 largest cities in New South Wales, ahead of Dubbo and Wagga Wagga. As anticipated, Sydney also has the lowest score for cost of living in New South Wales, but this alone is not sufficient to bring down its overall standing. Sydney’s talent pool is the best ranked in the state, which contributes heavily to its position.

Newcastle secures the sixth position in rankings, despite being the second most populated city in New South Wales and possessing the highest business landscape score.

Queensland

Queensland is 1 of only 2 states where the capital city does not rank first. Toowoomba, located west of Brisbane, has scored higher than any other Queensland city, ahead of Mackay and Brisbane.

Bundaberg, despite scoring second to last in the state, has by far the best cost of living score in Queensland. Hervey Bay ranks last as it has the worst unemployment rate of all 50 cities, which plays a significant role in its ranking.

Victoria

Victoria is the second state in which the capital city, Melbourne, doesn’t rank first or second. It comes in third. Melbourne is brought down by its cost of living score, which is the lowest in the country apart from Sydney and Canberra.
Located relatively close to Melbourne, Geelong ranked first despite having the second lowest cost of living score across Victoria. Victoria also holds the best internet speed score by far, scoring extremely high for upload speed and latency.

Nothern Territory

Darwin and Alice Springs both rank in the bottom half of the top 50 list. Darwin has a significantly better business landscape score compared to Alice Springs. When it comes to talent pool, both cities have very high scores, with Darwin edging slightly ahead. Darwin scores highest in the overall top 50 for both labour force and commute costs but scores lowest overall for upload speed and latency. Similarly, Alice Springs’ score is significantly brought down by the city’s extremely low business landscape score. Despite a sore lack of young workers, Alice springs ranks sixth for quality of talent due to a high percentage labour force, strong median income and worker health.

South Australia

The state’s capital city, Adelaide, comes out on top with a score well above its other 2 cities examined in the study. Adelaide has a significantly better talent pool and business landscape than the other South Australian cities.

Despite Victor Harbor’s proximity to Adelaide, its talent pool score is significantly lower than other cities. In fact, Victor Harbor scored lowest out of all 50 cities for 4 of the 6 talent pool factors. Mount Gambier, on the other hand, has the highest score of all 50 cities researched on rental score and mortgage score. This results in an impressive cost of living score.

Western Australia

Tasmania

New South Wales

Newcastle secures the sixth position in rankings, despite being the second most populated city in New South Wales and possessing the highest business landscape score.

Queensland

Queensland is 1 of only 2 states where the capital city does not rank first. Toowoomba, located west of Brisbane, has scored higher than any other Queensland city, ahead of Mackay and Brisbane.

Victoria

Nothern Territory

South Australia

Western Australia

Tasmania

Best and Worst City by Factor

When breaking down the best and worst cities by factor, it yields some interesting results. For example, Sydney holds the worst score for 3 of the 4 cost of living factors, with Canberra “beating” Sydney with the worst childcare cost score. When it comes to talent pool factors, Victor Harbor dominates scoring lowest for 4 of the 6 factors.

Melbourne has the most top scores ranging across 2 categories, ranking highest for internet upload speed, latency and young worker population. Despite Sydney scoring the worst for multiple factors, it scores the highest for workers’ health and download speed.

The best place to start a business by factor

Talent Pool Business Landscape Internet Speed Cost of living

Internet Speed

Internet speed data can only be measured using state data, so we ranked each state accordingly. Victoria held the top spot with a total internet speed score soaring above other states. Although the Australian Capital Territory is surrounded by New South Wales (which ranked second), it ranked last for internet speed with a significantly low download speed and latency score. Ranking just above the Australian Capital Territory is the Northern Territory which scored high for download speed but not so high for upload speed and latency.

Cost of living

Tasmania dominates the cost of living top 10 list, with all 3 cities in the top 5, making it the best state from a cost of living perspective. Hobart is the only capital city that made the top 10 cost of living list, ranking fifth overall. Not surprisingly, Sydney ranks last for 3 of the 4 factors analysed in determining the cost of living score due to its relatively high cost of living. Interestingly, none of the top 10 cities here are amongst the top 20 largest cities in Australia, showcasing the cost of living crisis in Australia’s bigger cities.

Talent Pool

Canberra has the best overall talent pool score. Its outstanding education score is a major factor, which might reflect the types of professionals the city and its jobs attract. South Australia and Tasmania are the only cities to not have a single city on the talent pool top 10 list. Adelaide and Hobart are the only capital cities not to make the list. Both of Northern Territory’s most populated cities made the list, with Darwin coming in second and Alice Springs sixth.

Business Landscape

Adelaide, Perth and Hobart make up the top 3 of this list. Surprisingly, Australia’s 3 largest cities in Sydney, Melbourne and Brisbane didn’t make the cut. It certainly raises the question of whether a major city is actually a good place to start a business. Hobart holds the most impressive short and long-term business survival rates. Despite Victor Harbour’s lack of business density, it still ranked in the top five for this category.

Internet Speed

Cost of living

Talent Pool

Business Landscape

Internet Speed

Cost of living

ABOUT THE DATA

This comprehensive study by Reckon evaluates the top 50 most populated Australian cities (50 largest urban areas in Australia by the Significant Urban Area** measure using the seed list here) for startup viability, integrating data from survey responses from small business owners around Australia and public datasets.

The results highlight cities excelling or underperforming in specific categories and those with high overall scores for business startup suitability. Our analysis looks at 18 essential socioeconomic factors mapped into 4 major categories consisting of Talent Pool, Business Landscape, Internet Speed and Cost of Living.

Talent Pool assesses workforce quality through median weekly incomes, demographic and educational factors, and the presence of universities, drawing data from ABS and Statista.

Business Landscape evaluates the business environment through business density, growth, and survival rates, using government and authority data.
Internet Speed reviews infrastructure capabilities based on median internet speeds and latency, with Speedtest by Ookla providing the necessary data.

Cost of Living considers living affordability through median rent, mortgage repayments, commute costs, and childcare fees, informed by ABS and government sources. We collected the aforementioned data from primary government sources such as ABS census data alongside over 800 survey responses from small business owners across Australia. This data was then processed through the following 5 steps:

Data collection from various government and authority sources
Normalisation of Likert scale survey responses and determining aggregated weightings for each factor/category
Creation of factor scores that are aggregated for all cities and normalised into a 0-100 scale.
Factor scores are aggregated and adjusted by survey weightings to create category scores
Overall Scores are calculated by combining category scores according to survey weightings.

It is important to understand that although the study seeks to provide a statistical representation of the best location to start a business it does not serve as financial advice for those seeking to do so. Moreover, comparing metrics collected via multiple sources may result in slight variations due to differences in data collection methodology. The factors used are as follows:

Personal Median weekly incomes – people aged 15 and over (excludes people aged 15 years and over who did not state their income)
Young workers – the number of people people aged 20-29
Percentage of people aged 15 years and over in the labour force
Percentage of people who reported being unemployed, aged 15 years and over
Percentage of people aged 15 years and over with a Bachelor Degree level education & above
Percentage of people with no long-term health condition(s)
Number of universities in the state
Number of businesses in the city
Annual % change in businesses
Business survival rate year 1 (state)
Business survival rate year 3 (state)
Median internet download speed Mbps (state*)
Median internet upload speed Mbps (state*)
Median internet latency ms (state*)
Median weekly rent
Median monthly mortgage repayments
Average daily commute cost (state)
Hourly fees Centre Based childcare (state*)

*Please note that statewide numbers have been used for internet speed, business survival rates, universities and childcare costs due to a lack of accurate city-specific data.
**The Significant Urban Area of ‘Canberra, ACT – Queanbeyan, NSW’ is referred to as ‘Canberra, ACT’ and all similar significant urban areas follow the same reference throughout.

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“Launching a startup in Australia, or anywhere, is no simple feat, but absolutely achievable. Small businesses are the backbone of the economy and success is everywhere. It’s interesting, however, that you might find some the least obvious cities in Australia may offer the best environments for startup prosperity. What I’m seeing by looking at factors like talent, infrastructure and living costs, is a diversification of opportunity across Australia’s cities. It may be time to ask yourself as an aspiring entrepreneur – Should you be looking to broaden your geographical horizons?”
– Sam Allert, Reckon CEO