Where some people see obstacles, others see opportunities. That’s certainly the case with starting a small business during a recession. While most people naturally focus on soft demand and the scarcity of capital, those with a contrarian eye see weakened competition, reasonable real estate costs, and a large pool of potential talent available.

One important factor is that the recession has not hit all parts of the country equally. Therefore, if you pick your spot correctly, you can still find a good place to start a small business.

Top Ten US Cities for Starting a New Business

There are many factors which make a particular city a good location for a new business, including general economic conditions, size and skill set of the employment pool, supply and demand, infrastructure (both physical and technological), and population growth.

Here are a list of 10 US cities where you can find many of these above favorable factors:

1. Raleigh, North Carolina. Raleigh benefits from an economy that is more skewed towards technology than manufacturing, so it has fewer industries suffering from long-term, non-cyclical declines. The IT base plus a strong presence of higher education helps to create a skilled pool of potential workers. Also, Raleigh is helped by the fact that some other North Carolina cities are also thriving, making businesses in Raleigh well situated to broaden out their markets. Outsource where possible.  Basic business support needs such as direct mail, call centers and telemarketing can all be readily outsourced to reduce your upfront investment and help you focus on the unique value proposition of your business.
2. Fort Collins, Colorado. Like North Carolina, Colorado benefits from having multiple areas which are maintaining economic growth despite the recession, which certainly helps a business gain momentum. Fort Collins in particular benefits from a combination of a relatively high median income level and a high level of educational attainment among its populace.
3. Houston, Texas. Already a major metropolitan area with over 5 million people, Houston still enjoys a below-average cost of living.
4. Lincoln, Nebraska. This is a good choice for a cost-conscious start-up, because Lincoln features both a low cost of living and a low cost of doing business.
5. Sacramento, California. Like most of California, Sacramento has seen dramatic price declines due to the real estate slump. However, while these create potential bargains, the city still benefits from a growing cultural and entertainment scene plus easy access to numerous outdoor recreational attractions.
6. Austin, Texas. Austin has enjoyed strong job growth, which is a fundamental sign of a thriving economy. A business contemplating e-commerce solutions may also be interested to know that Austin made Forbes magazine’s list of the 30 most-wired cities in the country. Use an attractive website design, internet  marketing and credit card processing solutions to lower promotional costs and increase sales via online channels. Internet marketing solutions like pay-per-click and SEO can be cost-effective ways to sell your products and services online.
7. Boise, Idaho. While still relatively small, Boise has enjoyed strong net migration, which suggests a growing pool of potential talent.
8. New York, New York. It’s not cheap, but it remains the world’s greatest city in the eyes of many, as evidenced by the fact that it still ranks near the top nationally in population growth. With businesses closing up shop and both retail and office space sitting idle, you should have plenty of leverage in rent negotiations.
9. Huntsville, Alabama. Huntsville is projected to have one of the fastest-growing job markets in the country, which should translate into a fast-growing retail base.
10. New Orleans, Louisiana. Last year, the U.S.Census Bureau named New Orleans the fastest-growing city in the United States. While this is largely a bounce-back from the effects of Hurricane Katrina, New Orleans offers new business start-ups a chance to be part of that comeback story. The Small Business Administration’s Disaster Loan Program is providing low-interest, long-term loans administered directly through the federal government. Another quick way to raise cash is to forgo the credit market altogether and leverage future profit instead. Business cash advance also referred to as merchant cash advance offers businesses a “cash jumpstart” based on their credit card receipts. Available through credit card processing companies and independent business cash advance companies provide immediate access to operating funds between $2,500 and $250,000. In exchange, the merchant agrees to remit a portion of future credit card receivables to the merhant cash advance provider. The credit card processors handle the transaction, automatically deducting a fixed percentage of each month’s credit card revenue. Revenue-based “repayment” allows businesses to manage their cash flow, paying more in flush times and less when resources are tight.

Obviously, location isn’t the only factor that determines the success or failure of a new business venture, but it can make a big difference when the economic wind is at your back.