The 7 best cities to start an IT consulting business
The field of IT consulting is booming, thanks to sustained economic growth, the money-saving shift to cloud computing, and an optimistic outlook for technological advances and innovation. Growth in information technology consulting is also on pace with the global technology market at a 5% annual growth rate, according to Forrester Research. This rise in IT spending for services, advice, and management is having an enormous impact on the U.S. economy and, as such, opportunities abound for small, independent IT consulting businesses.
While some IT consulting firms are opening shop in cities that don’t have deep roots in technology, others are flocking to areas that already have a strong presence in the industry.
After studying more than a dozen surveys and research reports from recruiting firms, financial analysts, and Insureon’s small business insurance cost data, we have selected the seven best cities (or metropolitan regions) to start an IT consulting business in 2018.
San Francisco Bay Area
Despite its high cost of living, the area encompassing San Francisco, San Jose, and Oakland remains the most professionally and financially rewarding metro area for IT professionals in the United States. Tech jobs have expanded to other metro areas and business sectors, but Silicon Valley is still home to many of the most desirable tech companies. Software engineers and IT professionals are the most sought-after employees there today, according to research from Glassdoor. More than 10% of the Bay Area’s labor force is in the technology industry, and San Francisco commands the highest average salary for tech workers in the country at $142,000, according to Hired.
In San Francisco, IT professionals pay a median annual premium of $1,100 for errors and omissions insurance and $500 for general liability insurance, with a median total of $790 annually for all types of business insurance.
The Seattle metropolitan area, home to Microsoft and Amazon, is experiencing some of the biggest gains in software engineer hiring, making it one of the top technology cities in the United States. Tech salaries are also growing faster in Seattle than any other city on this list, jumping more than 21% during the past five years, according to CBRE. The cost of living is rising, but expenses for housing and business operations are still much lower than the San Francisco Bay Area. Meanwhile, the average salary for tech workers in Seattle is $132,000, just $10,000 less than Silicon Valley, according to Hired.
IT professionals in Seattle pay a median annual premium of $690 for errors and omissions insurance and $430 for general liability insurance, with a median total of $530 annually for all types of business insurance.
The epicenter of entertainment has a vibrant job market and it’s experiencing a surge in tech-centric business. Los Angeles also boasts the best work-life balance in the country, according to the latest rankings by Indeed. The average tech worker salary is growing at one of the highest rates of all the top technology cities on this list, and Los Angeles was ranked as the third-most active city in the United States for entrepreneurs, according to Hired. Tech workers in Los Angeles earn an average annual salary of $129,000.
The cost of business insurance in Los Angeles is in the middle of the pack for the cities listed here. IT professionals pay a median annual premium of $810 for errors and omissions insurance and $500 for general liability insurance, with a median total of $500 annually for all types of business insurance.
New York City
While the cost of living and doing business in New York is second only to the Bay Area, the Big Apple continues to draw IT professionals with its culture, its opportunity for advancement, and its propensity to add new jobs in the field. New York City has added a staggering 32% more tech jobs in the last five years alone. During 2016, more than 400 new companies raised $9.5 billion in funding. Notable New York-based companies like Etsy have also gone public with valuations over $1 billion. Tech workers in New York earn an average annual salary of $129,000.
The high cost of living and doing business in New York is reflected in its business insurance rates, as well. In New York City, IT professionals pay a median annual premium of $1,170 for errors and omissions insurance – the highest for any city on this list – and $430 for general liability insurance. The median total for all types of business insurance is $700 annually.
Austin is accommodating a growing number of software engineers and IT professionals, and its share of tech jobs has been on the rise for years. The city’s booming economy and relatively low cost of living, combined with unique perks like its music and arts scenes, draw professionals in IT and other industries, as well. The city ranks 12th in the nation for work-life balance. The $118,000 average annual salary for tech workers is lower than other cities on this list, the lower cost of living in Austin equates to a higher overall standard of living.
In Austin, business insurance rates are lower than most of the other cities on this list. IT professionals pay a median annual premium of $830 for errors and omissions insurance and $290 for general liability insurance, with a median total of $450 annually for all types of business insurance.
The nation’s capital ranks sixth overall for work-life balance, with strong draws such as museums, parks, and cultural sites. Almost 8% of the region’s workforce is in technology, and while the cost of living is 22% higher than the national average, the city’s proximity to government-related jobs makes it a perennial destination for IT professionals. After declining in 2016, average tech salaries are on the rise. Tech workers in Washington, D.C., earn an average annual salary of $116,000.
At just $280 for the median annual premium, Washington, D.C., has the lowest rate for general liability insurance compared to other cities on this list. IT professionals pay a median annual premium of $870 for errors and omissions insurance, with a median total of $600 annually for all types of business insurance.
The mile-high city has recently experienced a tech resurgence, and IT-related jobs are growing in kind. Google, Slack, and Facebook are expanding their presence in Denver and the surrounding area with new or bigger campuses, and IT and software related employment grew 31% during the past five years, according to the Metro Denver Economic Development Corp. Thanks to a lower cost of living, tech professionals can stretch their dollars further and achieve an optimal work-life balance surrounded by natural beauty, cultural activities, and a robust local sports scene.
Denver has relatively low rates for business insurance compared to the other cities on this list. IT professionals pay a median annual premium of $710 for errors and omissions insurance and $290 for general liability insurance, with a median total of $500 annually for all types of business insurance.
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