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Lawrence doesn't fare well in ranking of best places for new businesses; numbers show a historic low for Kansas economy

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I would think Lawrence is one of the best small cities in America to start a business. After all, even an April snow shoveling business has a chance at success, as we’ve learned recently. But in a new report on the subject, Lawrence doesn’t rank well.

The financial website WalletHub has released its 2018 list of the Best Small Cities to Start a Business. Lawrence ranked No. 653 out of 1,261 cities with populations between 25,000 and 100,000. So, middle of the pack overall, but Lawrence’s ranking was the second lowest in Kansas.

Here’s a look at the Kansas communities that are ranked:

— Dodge City: No. 132

— Salina: No. 208

— Hutchinson: No. 252

— Manhattan: No. 254

— Garden City: No. 401

— Lenexa: No. 494

— Shawnee: No. 597

— Lawrence: No. 653

— Leawood: No. 968

The good news for Lawrence is it may not be on this list next year. Population growth is pushing it above the 100,000 mark. There are several high-ranking communities on this list that have no worries about that. Dodge City is the best small community in the state to start a business, according to this list, but population growth has struggled there. It has added about 500 people since the 2010 census, or about 2 percent, which is actually better than I thought it would be. It is better than some other places that rank high on the list. Hutchinson — which according to this list is in the top 20 percent of all small cities in the country for starting a business — has seen a population decline of about 400 people since the census.

So, everybody will have to make what they will of the list. In some ways it is counter-intuitive. Communities that have lower median wages and higher unemployment (thus an available labor pool) fare better in some parts of this ranking. Towns like Lawrence, though, should fare well in categories such as education levels and access to higher education.

As you can tell, I have some doubts about the outcomes of this report. But, it is worth noting, but probably not worth worrying too much about. What would be most interesting is why Lawrence and Manhattan rank so differently. In many reports that rely on demographics and other types of community statistics, Lawrence and Manhattan show up as pretty similar.

The report does provide some breakdown of the rankings. Each community was scored in three broad areas:

— Business environment: This category used statistics related to average length of work week, average commute times, growth rate in small business numbers, startups per capita, average growth of business revenues, and industry variety. Lawrence ranked No. 968 out of 1,261. Manhattan was 892, and the best in the state was Dodge City at No. 66.

— Access to Resources: This category used statistics related to small business loans per capita, job openings versus the unemployment rate, access to quality higher education, education levels of the workforce, growth in working-age population, and total job growth figures. Lawrence ranked No. 308 out of 1,261. Manhattan was No. 26 in the country and was the highest-ranked in the state, although Leawood also had an impressive ranking of No. 81.

— Business Costs: This category used statistics related to commercial lease rates, median incomes, corporate taxes and cost of living. Lawrence ranked No. 580 out of 1,261. Manhattan was No. 532. Hutchinson was best in the state at No. 400. Notably, Leawood was near the bottom in the entire country at 1,211. Remember, high incomes don’t cause you to score well in this report. Also, remember that person who just passed you in the Mercedes is from Leawood.

While I wouldn’t spend much time worrying about any of these rankings, I did stumble across some interesting state statistics while I was trying to get more information about some of these WalletHub numbers.

In short, they show that last summer was a historic low point for the Kansas economy in at least one key regard.

The Bureau of Labor Statistics releases a quarterly report related to the number of business establishments that open and close in the state. The most recent report is for June 2017. The report shows that during the second quarter of 2017, there were 18,692 job losses caused by Kansas business establishments that closed. It shows there were 10,204 jobs created by new establishments that opened.

So, the masters of the Kansas economy definitely had their finger on the minus key. But more noteworthy is the 18,692 job losses due to closings was the highest quarterly total since the third quarter of 2002. In other words, not even during the last recession did so many Kansans lose their jobs due to business closings.

But wait, there is more. The 10,204 jobs created by new establishments was the lowest number since at least 1992, which is as far back as the database went for me. A few months were very close to that number, but none actually were that low.

The business environment at a glance didn’t seem that bad in Lawrence last summer, but for the state as a whole, it apparently was feeling a double whammy.

Comments

Theodore Calvin 1 month, 1 week ago

Our free water giveaways, discounted trash rates and propensity to give away the bank to developers and allow them to dictate policy isn't enticing enough? Makes me wonder what other communities are giving away to businesses? I mean, business will always move to where there are no costs, right?

Mark Kostner 1 month, 1 week ago

This is something Lawrence needs to work on unless it's content as it is. I was seriously considering moving there prior to retirement but I didn't see that many job opportunities there unless I wanted to hop on the highway and commute. What few jobs I saw were similar to what was there when I was in college, restaurants and stores. Lawrence has a lot to offer as a place to live and I am surprised there aren't office parks full of companies founded by alumni like you see in many other university cities,

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