Best Cities for Small Business in Kentucky
Kentucky ranks #43 of 50 for small business, with a small business score of 39.1. Independence is its best city for small business at 61.4.
- Kentucky, all states
- #43 of 50
- Population
- 29,392
What Small Business Should Know About Kentucky
Kentucky ranks #43 out of 50 for small business owners and entrepreneurs, presenting some challenges for business formation and growth. The state's fiscal health score of 38/100 raises questions about the state's long-term fiscal trajectory, which can affect tax policy and regulatory stability.
Tax policy directly impacts the bottom line. Kentucky's overall tax burden is 8.93% of income, with a 6.2% income tax rate that applies to both personal and pass-through business income. The 6% combined sales tax rate is moderate and worth factoring into pricing strategy. The economic environment (score: 24/100) with 4.6% unemployment shows healthy labor availability.
Population is roughly stable, meaning market growth will depend on capturing share rather than riding demographic expansion. The education system (score: 68/100) produces a reasonably well-prepared workforce. A typical home value of $232,577 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 |
|---|---|---|---|---|---|---|---|
| 1Independence | A | 61.4 | 64.4 | 69 | 66 | 47 | 29,392 |
| 2Florence | B+ | 57.4 | 60.5 | 54 | 51 | 53 | 32,803 |
| 3Jeffersontown | B+ | 57.1 | 61.1 | 64 | 53 | 36 | 29,199 |
| 4Georgetown | B+ | 56.1 | 60.3 | 53 | 56 | 50 | 39,117 |
| 5Nicholasville | B | 54.9 | 58.0 | 46 | 50 | 57 | 32,197 |
| 6Lexington-Fayette urban county | B+ | 54.3 | 59.9 | 43 | 52 | 50 | 323,725 |
| 7Elizabethtown | B | 52.9 | 57.4 | 35 | 44 | 67 | 32,576 |
| 8Covington | B | 49.6 | 57.5 | 28 | 46 | 46 | 41,110 |
| 9Erlanger | B | 49.5 | 58.4 | 48 | 36 | 33 | 19,875 |
| 10Richmond | C+ | 48.8 | 55.5 | 26 | 38 | 66 | 37,111 |
| 11Louisville | C | 47.6 | 50.0 | 40 | 46 | 40 | 631,818 |
| 12Frankfort | C+ | 46.6 | 53.8 | 28 | 41 | 40 | 28,503 |
| 13Owensboro | C | 46.3 | 51.6 | 30 | 42 | 45 | 60,302 |
| 14Henderson | C | 44.1 | 49.6 | 27 | 37 | 38 | 27,852 |
| 15Paducah | C | 43.3 | 49.8 | 21 | 39 | 37 | 26,845 |
| 16Bowling Green | C | 41.9 | 50.8 | 14 | 39 | 42 | 75,388 |
| 17Ashland | C | 41.6 | 50.8 | 22 | 35 | 30 | 21,295 |
| 18Radcliff | D | 38.9 | 45.6 | 36 | 21 | 24 | 22,864 |
| 19Hopkinsville | D | 38.8 | 45.9 | 26 | 34 | 22 | 30,906 |
| 20Madisonville | D | 36.3 | 46.6 | 21 | 16 | 27 | 19,515 |
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: Kentucky for Other Lifestyles
Frequently Asked Questions
Is Kentucky a good state for small business?
Kentucky ranks #43 out of 50 for small business with a persona-weighted score of 39.1/100. Its strongest relevant category is Affordability (83/100) and its weakest is Outdoor Access (10/100).
What is the best city for small business in Kentucky?
Independence ranks #1 in Kentucky for small business with a score of 61.4/100, followed by Florence and Jeffersontown.
What factors are most important for small business in Kentucky?
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.