Best Cities to Start a Business in Alabama

Last updated: March 19th, 2024

Alabama’s economy is much more diverse and dynamic than you might think. Automotive companies like Honda, Mercedes-Benz, Toyota, and Hyundai all have a major presence in the state. A number of major technology and communications companies also have bases in Huntsville or Birmingham, including AT&T, telecommunications provider Deltacom and computer graphics company Intergraph.

These major companies maintain tens of thousands of positions in the state for college-educated workers in a variety of fields, challenging the common notion that Alabama has a staid economy centering on agricultural production.

A shift towards advanced industry in the state and a very low cost of living have contributed to Birmingham’s fertile and lively startup scene. Startups based in the city experienced a dramatic increase in funding in 2016, with Shipt, an online grocery service leading the pack, receiving over $40 million in Series A funding.

The central locale for Birmingham’s bustling startup sector is the Innovation Depot, the largest of its kind in the Southeast, with 140,000 square feet of office space, labs, and recreational facilities for young tech companies. The time has never been better for entrepreneurs to relocate to Alabama and start a business.


Only cities with over 50,000 inhabitants are reported in the results. Some data had to be interpolated to the county level and extrapolated to all the cities in the county. We concentrated on the following metrics to obtain our ranking: Cost of livingBest state for businessUnemploymentKauffman index, and Universities.

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