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Little Rock Recognized for Low Startup Costs

2 min read

Many factors go into the establishment of a tech startup ecosystem and its subsequent growth, and public and private sources in central Arkansas have worked together over the past eight years or so to provide them.

The Little Rock metro now boasts multiple startup co-working spaces and other resources aimed at helping get early-stage companies off the ground.

A recent survey by SmartAsset.com of the nation’s largest 81 cities confirms the efforts of Little Rock leaders to encourage startup growth. Its ranking of U.S. cities with the lowest startup costs includes Little Rock at No. 7.

Methodology used to determine the rankings included calculating the total expected startup costs over the first year of operation for a startup factoring the following expenses: office space, utilities, filing fees, legal/accounting and payroll.

Of course, those factors represent only part of the financial puzzle faced by startups that seek investment funds to survive. But for local startup leaders, knowing central Arkansas provides a foundation through low overhead is a positive.

“With the lower costs of doing business, inexpensive co-working space and available programming and mentorship, entrepreneurs seeking early stage investment can spend more of their capital efficiently on the only thing that matters: customer acquisition,” said Lee Watson, president of the Venture Center, a startup incubator in downtown Little Rock. “This provides entrepreneurs in central Arkansas an advantage by giving them the ability to move faster.”

Jamie Fugitt, an attorney with Little Rock’s PPGMR Law who specializes in startups and intellectual property law and serves on the board of the Innovation Hub in North Little Rock, said the low costs associated with starting up in central Arkansas won’t guarantee a startup’s success, but they certainly don’t hurt.

Startups that can generate the capital to keep going will see that capital go further and last longer because of low startup costs, such as those cited by SmartAsset, he said.

“All other things being equal, startups in central Arkansas have a competitive advantage when their dollar goes farter than their competitors,” Fugitt said.

Little Rock may still operate under the radar compared to startup hotspots such as Austin, Texas, and Boulder, Colorado. But Jay Chesshir, CEO of the Little Rock Regional Chamber of Commerce, believes the ranking showcases the region’s support of its growing tech startup ecosystem.

“The metro Little Rock area offers a diverse and cost-effective marketplace for new companies looking to capitalize on access to talent, market-sector expertise and global opportunities,” he said. “When you couple an atmosphere that encourages new ideation and technology creation with a growing number of talented entrepreneurs, creative collisions produce new companies with exciting futures.”

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