Orlando: Where Startups Sprout


2004 Census Population: 205,648 (estimate)

Pros: A wealth of entrepreneurial resources, including a rapidly expanding workforce, the Disney/SBA National Entrepreneur Center, a large number of retired entrepreneurs and executives, numerous universities and educational facilities. Lower operating costs than comparable large metropolitan areas, no state income tax, a variety of business tax incentives

Cons: The usual range of big-city problems, such as traffic, congestion, and rising home prices

With a virtually endless stream of tourists and retirees, Orlando seems like an unlikely hotbed for entrepreneurship. While it's not surprising that the Magic Kingdom generates a fair share of spinoffs, many don't know that the city also boasts a balanced and growing mix of unrelated startups -- low-tech, high-tech, and everything in between.

"It's just very well-rounded," says Erin Heston, spokeswoman for Enterprise Florida, a public-private partnership focused on the state's economic development.


  In large part, the diversity results from the cornucopia of resources the city offers to small-business owners. First, it provides an ample supply of qualified manpower. Like other "destination cities," Orlando has a huge influx of college students, immigrants, and highly skilled midlifers looking to start over in the Sunbelt. From 1990 to 2000, Orlando's population grew 17%, to 187,000. By 2009, the population is projected to reach 220,000.

All those newcomers allow business owners to set higher hiring standards while still mitigating rapid wage increases. "That, in and of itself, makes it a positive location," says John Boyd, founder and president of the Boyd Company, a corporate-site-location consultancy located in Princeton, N.J.

Orlando's large hospitality-trained workforce also contributes to the city's favorable business climate, since many service skills easily transfer to other "back office" industries, such as call centers and tech-support hotlines, he says.


  In addition, the city reaps some unexpected benefits from its perennial flock of snowbirds. Retirees tend to make for punctual employees with a positive work ethic. And in many cases, they're themselves retired business executives or entrepreneurs who either launch new enterprises once settled in Orlando or spend time mentoring others in their endeavors.

In 2004, the Orlando chapter of SCORE, a nationwide nonprofit that provides free counseling to small businesses, was selected as chapter of the year. The Orlando group advised more than 1,800 clients last year alone, and many of the 55 counselors who volunteer their time are retired CEOs and COOs.

Chapter chairman Bob Shephard says the benefit of having such a wealth of experience concentrated in a single geographical region can't be underestimated. "These people really know what they're doing," he says. "They've been there."


  Finally, Orlando's got a growing infrastructure designed to help boost the small-business success rate. The Disney/SBA National Entrepreneur Center is one of only two in the country designed to provide a full range of services to companies in all stages of development. There's also the University of Central Florida -- one of fastest growing schools in the nation -- which has a top-rated technology incubator and a Small Business Development Center.

Orlando is also just downright cheaper when it comes to the cost of doing business. The Boyd Company's annual comparison of operating costs revealed that the Orlando area was significantly less expensive than many other large metropolitan locations, especially in terms of labor and power prices.

With so much going for it, Orlando is fast turning into a destination city for budding entrepreneurs -- and it may be just a matter of time before it turns into the small-business Magic Kingdom.

Coming Thursday: A conversation with Jack Schultz, author of Boomtown USA.

Friday: A look at one thriving company and where it's choosing to expand. Plus, a slide show spotlighting some of the nation's most innovative small-business cities.

Before it's here, it's on the Bloomberg Terminal.