Best California Cities for Small Businesses

California has one of the most dynamic economies in the world, and small businesses are the foundation of California’s innovation and diversity. The Golden State, home to almost 40 million people, provides unmatched access to consumers, a highly qualified labor force, and thriving industries ranging from technology to agriculture. However, certain cities are far more favorable to entrepreneurs than others due to issues like high costs and regional differences in regulations.

To determine the best cities for small business owners, the B2B Reviews team looked at county-level sales tax rates, average commercial rent, the number of employer firms, and population data.

The California cities that best balance affordability, growth, and business opportunities are highlighted in our ranking. These 10 cities stand out for their capacity to foster entrepreneurial success, whether you’re starting a new business or hoping to grow.

Check out our methodology to learn how we ranked California’s cities.

Top 10 Cities in California for Small Businesses

1. Riverside

Riverside claims the top spot as California’s best city for small businesses, thanks to its strong mix of growth, affordability, and market potential. The city ranks 12th statewide in population share, giving entrepreneurs access to a substantial customer base. Riverside has also seen steady momentum in recent years, with 13th-place population growth signaling rising demand and new opportunities for local businesses.

The city stands out for its competitive 11th-place ranking in employer firm density, showing a healthy and expanding business community. On the cost side, Riverside benefits from a relatively favorable tax climate, ranking 6th lowest in county sales tax, while its 33rd-place ranking for commercial rent affordability keeps overhead manageable compared to more expensive coastal markets. Altogether, Riverside balances size, growth, and costs, making it the most well-rounded environment for small business success in California.

• City population: 321,560
• City population as a percentage of the state: 0.82%
• Percent increase of population from 2020-2023: 1.91%
• Percent of employer firms: 0.50%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $20.85

2. Fresno

Fresno secures the second spot on the list, offering small business owners a strong balance of affordability and opportunity. As California’s fifth-largest city by both population and share of employer firms, Fresno provides entrepreneurs with access to a large and growing customer base. While its population growth ranks 21st statewide, the city still shows steady momentum, creating long-term potential for expansion.

Business costs are another advantage: Fresno holds the 14th spot for affordable commercial real estate, helping reduce overhead compared to pricier coastal markets. Its county sales tax rate, however, ranks 37th, which slightly raises operating expenses. Even so, Fresno’s size, business density, and relative affordability make it one of the most promising places in California for small business success.

• City population: 547,260
• City population as a percentage of the state: 1.40%
• Percent increase of population from 2020-2023: 0.84%
• Percent of employer firms: 0.74%
• County sales tax rates: 13.98%
• Average commercial real estate rent per square foot: $26.39

3. San Diego

San Diego ranks third overall, standing out as one of California’s largest and most business-dense cities. It holds the second-largest share of the state’s population and the second-highest percentage of employer firms, making it a major hub for entrepreneurial activity. While its population growth ranks 24th statewide, San Diego’s established size and diverse economy provide a stable customer base across industries like biotech, defense, and tourism.

The city also benefits from a competitive county sales tax rate, ranking 6th lowest, which helps offset operating costs. However, San Diego faces challenges with affordability: its commercial rent costs rank 62nd statewide, among the highest in California. For business owners who can manage the overhead, San Diego offers unmatched market access and long-term opportunity.

• City population: 1,394,555
• City population as a percentage of the state: 3.56%
• Percent increase of population from 2020-2023: 0.70%
• Percent of employer firms: 2.87%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $29.03

4. Anaheim

Anaheim ranks fourth overall, supported by its strong business base and tourism-driven economy. The city holds the 10th-largest share of California’s population and ranks 9th statewide in employer firms, highlighting its well-developed entrepreneurial presence. Although population growth has been slower, placing 43rd from 2020 to 2023, Anaheim continues to offer steady consumer demand and market stability.

Its county sales tax rate ranks 6th lowest, giving business owners a cost advantage, while commercial rent remains moderate at 29th in affordability. Altogether, Anaheim provides a strong balance of established infrastructure, tax benefits, and access to customers, making it a competitive environment for small business growth.

• City population: 342,883
• City population as a percentage of the state: 0.87%
• Percent increase of population from 2020-2023: -1.09%
• Percent of employer firms: 0.55%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $19.83

5. Santa Ana

Santa Ana ranks among California’s top cities for small businesses thanks to its central Orange County location and diverse population. While its population share is 14th in the state and recent growth ranks 28th, the city makes up for it with a strong entrepreneurial presence–12th overall for employer firms.

Santa Ana also benefits from one of the more favorable tax environments in California, holding the 6th lowest county sales tax rate. Commercial real estate rents are relatively affordable as well, coming in 40th statewide. Altogether, Santa Ana offers small business owners a stable, well-connected market with manageable costs and strong long-term potential.

• City population: 312,642
• City population as a percentage of the state: 0.80%
• Percent increase of population from 2020-2023: 0.45%
• Percent of employer firms: 0.48%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $21.87

6. Fontana

Fontana is one of California’s fastest-growing cities for small businesses, ranking 5th statewide in population growth. Its expanding customer base makes it an attractive location for entrepreneurs looking to tap into new demand. While the city ranks 20th for population share and 47th for employer firm concentration, its affordability and growth trajectory help balance those factors.

Fontana also benefits from a favorable tax environment, with a county sales tax rate that ranks 6th lowest in the state, and commercial rent that falls in the 26th most affordable spot. Together, these advantages position Fontana as a cost-effective and opportunity-rich environment for small business owners.

• City population: 216,100
• City population as a percentage of the state: 0.55%
• Percent increase of population from 2020-2023: 3.31%
• Percent of employer firms: 0.21%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $19.09

7. Corona

Corona offers a balanced environment for small business owners, combining steady growth with relative affordability. The city ranks 34th in population share statewide, giving entrepreneurs access to a mid-sized but growing market. Its 12th-place ranking in population growth from 2020 to 2023 highlights increasing demand and new opportunities for local businesses.

Corona also holds the 31st spot for employer firm concentration, reflecting a healthy entrepreneurial community. Business costs remain competitive, with the county sales tax rate tied for 6th lowest in California and commercial rent ranked 23rd in affordability. Altogether, Corona provides small business owners with a promising mix of market growth and manageable expenses.

• City population: 160,491
• City population as a percentage of the state: 0.41%
• Percent increase of population from 2020-2023: 2.00%
• Percent of employer firms: 0.29%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $18.69

8. Ontario

Ontario ranks among California’s strongest emerging cities for small businesses, driven by its 4th-place population growth from 2020 to 2023. As the 25th largest city in the state by population share, Ontario offers entrepreneurs access to a sizable and expanding customer base. Its business community is well-established, ranking 23rd in employer firm concentration, which signals strong entrepreneurial activity.

On the cost side, the city benefits from a county sales tax rate tied for 6th lowest statewide, while commercial rent is less affordable, placing 48th overall. Even with higher rent, Ontario’s rapid growth, central location, and strong business presence make it a competitive option for small business success.

• City population: 182,782
• City population as a percentage of the state: 0.47%
• Percent increase of population from 2020-2023: 4.02%
• Percent of employer firms: 0.35%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $23.82

9. Irvine

Irvine is a leading business destination in California, combining a thriving economy with steady growth. The city ranks 13th in population share statewide, offering entrepreneurs access to one of the largest customer bases in Southern California. From 2020 to 2023, Irvine posted the 10th highest population growth rate, further strengthening demand for local goods and services. Its entrepreneurial ecosystem is well-developed, with the city placing 25th for employer firm concentration.

While Irvine benefits from a county sales tax rate tied for 6th lowest in the state, commercial rent is a major hurdle, ranking 53rd and among the most expensive statewide. Despite high overhead, Irvine’s growth, talent pool, and industry diversity, spanning tech, healthcare, and education, make it a prime choice for businesses that can manage the costs.

• City population: 315,065
• City population as a percentage of the state: 0.80%
• Percent increase of population from 2020-2023: 2.14%
• Percent of employer firms: 0.33%
• County sales tax rates: 13.75%
• Average commercial real estate rent per square foot: $24.71

10. Roseville

Roseville rounds out the top 10 with one of the fastest-growing markets for small businesses in California. The city ranks 35th in population share statewide, but its explosive growth–2nd highest in the state from 2020 to 2023–signals a rapidly expanding customer base and strong demand for new businesses. Roseville also offers a well-established entrepreneurial community, placing 26th in employer firm concentration.

Business costs are favorable, with the lowest county sales tax rate in California (1st overall), helping reduce operating expenses. While commercial rent is less affordable, ranked 43rd statewide, the city’s combination of affordability, growth, and opportunity makes it one of the most promising environments for small business success.

• City population: 159,230
• City population as a percentage of the state: 0.41%
• Percent increase of population from 2020-2023: 7.21%
• Percent of employer firms: 0.32%
• County sales tax rates: 13.25%
• Average commercial real estate rent per square foot: $23.10

Methodology

To find the best cities in California for small business success, B2B Reviews analyzed a range of key factors, including total population, population growth trends, the share of employer firms, local sales tax rates, and average commercial rent prices.

Each city was scored across these five indicators, with results weighted and combined into a 100-point index.

City Population as a Percentage of the State — Total 20 Points

Cities with larger population shares scored higher, reflecting greater customer reach.

Percentage of Population Growth (2020-2023) — Total 20 Points

Cities with faster growth ranked higher, as growth signals rising demand.

Percentage of Employer Firms — Total 20 Points

A higher concentration of businesses suggests stronger entrepreneurial ecosystems.

County Sales Tax Rate — Total 20 Points

Lower combined rates improved rankings by reducing cost burdens..

Average Commercial Real Estate Rent (per square foot) — Total 20 Points

More affordable rental markets received higher marks, supporting startups with limited budgets.

The Bottom Line

California remains a powerhouse for small businesses, but affordability and opportunity vary widely across the state. Inland cities such as Riverside and Fresno shine for their growth and lower operating costs, while coastal hubs like San Diego and Irvine provide unmatched access to customers and business ecosystems—albeit at a higher price.

For entrepreneurs, choosing the right California city comes down to aligning your business goals with local market conditions. By weighing factors like population growth, tax environment, and real estate affordability, small business owners can find the city that best supports their long-term success.

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