Report: Five of the 10 worst small U.S. cities for small businesses are in NJ

People wearing masks walk the boardwalk on May 24, 2020 in Wildwood, New Jersey. (Photo by Mark Makela/Getty Images)

Five of the top 10 worst small U.S. cities for small businesses are located in New Jersey, according to a new report.

Wallethub compared more than 1,300 small American cities to determine which would foster the most growth for small businesses based on 20 key metrics, including accessible financing, human-resource availability, workforce education levels, office space costs, labor costs, and more, such as coronavirus death rates. 

Several New Jersey locations scored very low for business environment and business costs.

Here are the worst cities to start a small business, falling to the bottom of the list, starting from the bottom:

  • Westfield, New Jersey
  • Ridgewood, New Jersey
  • Hoboken, New Jersey
  • Trumbull, Connecticut
  • Atlantic City, New Jersey
  • Olney, Maryland
  • Clifton, Maryland
  • West New York, New Jersey
  • Potomac, Maryland
  • Milton, Massachussetts

Meanwhile, Utah is home to six of the top 10 best cities, according to the report.

The top 10 "Best Small Cities for Starting a Business" in 2021 are:

  • St. George, Utah
  • Cedar City, Utah
  • Williston, North Dakota
  • Washington, Utah
  • Logan, Utah
  • Aberdeen, South Dakota
  • Midvale, Utah
  • Fort Meyers, Florida
  • Clearfield, Utah
  • Bozeman, Montana

These cities ranked highly in all of Wallethub's determining factors. Bozeman and Williston, for example, ranked highest in Wallethub's analysis of the most startups per capita. Washington and St. George had the highest average growth in the number of small businesses in their respective areas. 

The COVID-19 pandemic forced the permanent closure of an estimated 100,000 small businesses as of August, according to Yelp's Local Economic Impact Report published in September of 2020, though experts indicate a significant recovery over the next several years.

FOX BUSINESS contributed to this report.