Business Costs and Living Costs in OKC
The cost of living… The cost of starting a business…
No doubt, Oklahoma City is a business-friendly city. It’s easy to obtain start-up funding and the local economy is thriving. When it comes to hiring, it’s easy finding talented people when you can draw from a pool of well-educated residents. However, as attractive as these results are when it comes to starting or running a business, it’s also important that the city offers a great place to live, enjoy life and raise a family. Oklahoma City offers all of that and at a more affordable cost of living than most other major urban metropolises in the country. Add to that the fact that start-up costs are also quite affordable and you have a formula that has made Oklahoma City a great place to live and start a business.
Bottom line, when it comes to affordability and starting a business, they are indeed two sides of the very same coin. When looking for a great city to put down your entrepreneurial roots, it’s important that you examine both sides of that coin. After all, just because a city may be affordable to live in—not to mention an exciting place to live—that doesn’t necessarily mean it’s an affordable place to start your business. Of course, the flip side to that argument is also true. Ideally, someone who is looking to start a business should know that it’s both an affordable place to live and an affordable place to start their business. In the case of Oklahoma City, this is certainly true. So, let’s look briefly at both.
The Very Affordable Cost of Living
Recently, Kiplinger ranked the 10 most affordable cities in which to live and Oklahoma City came in at 9th most affordable (cost of living 9.7% below the national average). Forbes also does an annual ranking and in their survey Oklahoma City came in at #4th most affordable. In both cases, they considered the fact that the cheap life doesn’t always guarantee the good life. A number of factors were considered in both cases, such as household incomes, home values, and unemployment rates, and in both cases, home values were below the national average, and the jobless rate better than average.
Median household income traditionally fell below the national average in these cities, but paychecks purchased more than in other less affordable cities. In the case of Kiplinger, they also measured commute time as a factor and Oklahoma City compared quite favorably with a 20 minute commute time compared with a national average of 26 minutes. The cost of commuting is no small factor for employees and for employers’ ability to attract workers. In the Forbes survey they itemized the cost of living and found that costs in Oklahoma City fell below the national average for groceries by 10.1 %; utilities by 10.1 %; transportation by 2.1 %; and health by 6.0 %. Along with home costs which were below the national average, these categories sum up the major expenses for which a family typical spends and Oklahoma City ranked quite well.
Speaking of home prices, Credit.com does an annual survey of affordability as well, with a specific focus on housing costs. Given that housing is typically the largest component of family expenses, it’s worth noting where Oklahoma City ranked in their survey. As a guideline, they identified percent of income spent on housing by creating two categories: Least Housing Poor (most affordable) and Most Housing Poor (least affordable). Oklahoma City came in just shy of top-ranked Pittsburgh as being the second most affordable city in the country in terms of housing costs. That’s right, we got second… in the nation. That’s huge for Oklahoma City.
The Very Affordable Cost of Starting a Business
When considering great cities to start a business, Oklahoma City ranks even more impressively. Kiplinger ranked it #1 in its annual Great Cities for Starting a Business survey. In doing so, they noted that business costs were 4.9% lower than the U.S. average, and though the city’s business tax climate is not as attractive, it’s more than compensated by the fact that the city and state provide significant incentives to offset some of the tax impacts and attract companies. Programs such as the state’s "quality jobs" incentive, offers companies a cash rebate for creating new positions that pay better than the county's average wage.
In their annual survey of “Cities Worth Moving to If You Want to Launch a Business,” Entrepreneur Magazine also ranked Oklahoma City at the top of the heap at #1. One important indicator was that it’s very easy to start a business in the city, in that the necessary paperwork can be done in one day—huge cost savings by any calculation. Not long ago, the Business Journals publication conducted a “Small-business Vitality Rankings” survey and as noted in an article in The Fiscal Times, there were many factors influencing Oklahoma City’s position as #2 in the nation, just behind Austin, Texas.
In the Times’ story, the author points to the fact that the state had 52 certified business incubators, all which provided some form of assistance for startups such as affordable lease space and administrative services. In quoting Gary Nelson, CEO of iThryv LLC, quality of life, a revitalized downtown, and cultural activities, along with a talented workforce, enabled him to maintain a one percent employee turnover rate. With costs related to turnover as high as 6-9 months of salary, a low turnover rate is extremely important in keeping business costs at a minimum.