Best Cities for Small Business in Iowa
Iowa ranks #14 of 50 for small business, with a small business score of 65.8. Waukee is its best city for small business at 73.0.
- Iowa, all states
- #14 of 50
- Population
- 29,236
Why Iowa Works for Small Business
Iowa ranks #14 out of 50 for small business owners and entrepreneurs, offering a favorable climate for new ventures. The state's fiscal health score of 66/100 signals a well-managed state government with sustainable finances — the kind of stability that benefits long-term business planning.
Tax policy directly impacts the bottom line. Iowa's overall tax burden is 9.23% of income, with a 3.8% income tax rate that applies to both personal and pass-through business income. The 6.94% combined sales tax rate is moderate and worth factoring into pricing strategy. The economic environment (score: 49/100) with 3.5% unemployment indicates tight labor markets — good for consumer spending but potentially challenging for hiring.
Population is roughly stable, meaning market growth will depend on capturing share rather than riding demographic expansion. The education system (score: 69/100) produces a reasonably well-prepared workforce. A typical home value of $239,547 helps attract and retain employees who can afford to live nearby.
All 20 Cities Ranked for Small Business
| # City | Grade | Small Business score | Overall | Household finances | Economy | Growth | Population |
|---|---|---|---|---|---|---|---|
| 1Waukee | A+ | 73.0 | 70.9 | 71 | 71 | 95 | 29,236 |
| 2Ankeny | A+ | 69.9 | 69.0 | 80 | 72 | 62 | 72,615 |
| 3Urbandale | A+ | 69.4 | 69.9 | 77 | 73 | 57 | 46,595 |
| 4Bettendorf | A | 65.1 | 65.5 | 72 | 67 | 57 | 39,647 |
| 5Marion | A+ | 63.5 | 67.3 | 63 | 61 | 52 | 41,896 |
| 6West Des Moines | A | 61.8 | 66.1 | 62 | 64 | 47 | 71,083 |
| 7Cedar Rapids | B+ | 56.2 | 60.3 | 51 | 51 | 48 | 137,264 |
| 8Cedar Falls | B+ | 55.4 | 61.5 | 45 | 59 | 45 | 40,888 |
| 9Dubuque | B | 53.8 | 58.6 | 45 | 52 | 49 | 59,174 |
| 10Mason City | B | 53.8 | 57.0 | 46 | 52 | 43 | 27,050 |
| 11Sioux City | C+ | 51.1 | 54.6 | 42 | 52 | 41 | 86,101 |
| 12Council Bluffs | C | 49.1 | 52.1 | 41 | 48 | 44 | 62,586 |
| 13Iowa City | B+ | 48.9 | 59.3 | 17 | 53 | 47 | 75,752 |
| 14Des Moines | C | 48.6 | 52.0 | 41 | 48 | 40 | 212,421 |
| 15Ames | B+ | 48.5 | 60.8 | 20 | 54 | 43 | 67,669 |
| 16Fort Dodge | C | 47.8 | 50.1 | 37 | 48 | 42 | 24,827 |
| 17Davenport | C | 47.1 | 49.7 | 41 | 45 | 38 | 100,913 |
| 18Ottumwa | C | 46.5 | 51.6 | 35 | 45 | 34 | 25,430 |
| 19Marshalltown | C+ | 45.9 | 54.0 | 44 | 31 | 24 | 27,626 |
| 20Waterloo | C | 45.0 | 49.8 | 35 | 39 | 37 | 67,008 |
City small business scores use each city's own data, with the category weights rescaled over the categories the city has; outdoor access has no city-level measure and is left out.
Compare: States with Similar Small Business Rankings
Also See: Iowa for Other Lifestyles
Frequently Asked Questions
Is Iowa a good state for small business?
Iowa ranks #14 out of 50 for small business with a persona-weighted score of 65.8/100. Its strongest relevant category is Affordability (86/100) and its weakest is Outdoor Access (22/100).
What is the best city for small business in Iowa?
Waukee ranks #1 in Iowa for small business with a score of 73.0/100, followed by Ankeny and Urbandale.
What factors are most important for small business in Iowa?
Rankings weighted toward business-friendly tax climate, strong economy, population growth, workforce quality, and transportation infrastructure — what matters when starting or running a small business.