The best places to launch a business

Why I Launched Here

We asked entrepreneurs in all 50 Best Places how their hometown treats business owners. See how the cities stack up.

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What do you consider most important for a business-friendly environment?

• Low taxes
• A growing local economy
• Affordable homes
• Low crime
• High-quality labor pool

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(Fortune Small Business) -- We've all heard the hype: In our wireless world, your company can thrive from a loft in Brooklyn or a houseboat in Hawaii. Where you are doesn't matter, because we're all on the same vast, virtual plane. Right?

Wrong. Location matters more than ever before. The Great Recession redrew the map of America. Entire towns sank in the subprime mortgage crisis; capitals of finance and manufacturing were brought to their knees.

And while the headlines heralded each new disaster, a quieter but equally important phenomenon was taking place. A handful of communities -- places like Houston, Oklahoma City and Huntsville, Ala., on Fortune Small Business's annual Best Places to Launch list -- were soldiering through the recession almost unscathed.

At the same time, only 42% of U.S. entrepreneurs believe that their current location is the best place for them to thrive, according to the latest FSB/Zogby International poll. We believe that figure should be much higher. This year FSB partnered with the Ewing Marion Kauffman Foundation to find the 50 most business-friendly communities in America. With help from Robert Fairlie, an economist and leading scholar of entrepreneurship at the University of California, Santa Cruz, we sifted through such data as per capita income, hourly wages, workforce quality, crime rates, taxes and foreclosures.

We also looked at population size. While some entrepreneurs prefer to locate near major cities, some opt for the intellectual spark and intimacy of college towns and other small, close-knit communities. One size doesn't fit all, so our list is divided into three tiers: small, medium and large.

Historically, fast-growing small companies have led the U.S. economy out of recession. And according to our latest poll, nearly half of all small business owners would consider moving if doing so would help their companies.

The next wave of prosperity is yours to surf. Where will you start?