For years, we’ve been told that America’s biggest cities are the epicenters of entrepreneurship. They attract the talent, capital, and headlines. But new data from Bluevine tells a different—and frankly more interesting—story about where small businesses actually thrived in 2025.
According to a new Bluevine study, small businesses didn’t just hold their own last year—they flourished, especially in small and mid-sized cities. The findings, drawn from internal data across more than 200,000 active Bluevine accounts and supported by a national survey of more than 1,000 small business owners, show that while large metros still attract the most applications overall, the fastest growth is happening elsewhere.
In other words, the momentum has shifted.
Small and Mid-Sized Cities Are Powering the Next Growth Wave
When Bluevine analyzed year-over-year growth in new business checking account applications, it showed that while America’s largest cities received the most Bluevine account applications, small and medium cities dominated the list of the fastest-growing metros:
- Indianapolis (+361%)
- Columbus, Ohio (+200%)
- Washington, D.C. (+175%)
- Sacramento (+147%)
- Phoenix (+120%)
That’s not a fluke—it’s a signal.
These cities offer something many entrepreneurs actively seek: lower operating costs, access to talent, and communities that still feel navigable for small businesses. They also reflect a broader decentralization of opportunity, accelerated by remote work, shifting housing patterns, and a growing willingness among entrepreneurs to build businesses where life is more affordable and sustainable.
One data point stands out in particular. Washington, D.C. saw applications surge at roughly the same time large-scale federal layoffs were announced, finishing 2025 as the metro with the third-highest number of applications overall—behind only New York and Los Angeles. That suggests a familiar pattern: when jobs disappear, entrepreneurship often fills the gap.
A Rebound Year After Uncertainty
Across all metros, 2025 marked a rebound year for small businesses after a rocky and uncertain 2024. Several specific industries showed especially strong year-over-year growth in funded business checking accounts, including:
- Administrative services (+47.6%)
- Education (+42%)
- Retail (+41.7%)
- Management services (+39.2%)
- Health and wellness (+39.1%)
These gains point to a pragmatic kind of entrepreneurship—businesses focused on services, education, and everyday needs rather than hype-driven trends. Health and wellness, in particular, continues to benefit from consumers prioritizing well-being, while administrative and management services reflect the ongoing demand for outsourced expertise in leaner business environments.
Not All Industries Are Recovering at the Same Pace
That said, the rebound hasn’t been uniform.
When Bluevine measured growth against its all-industry baseline, several sectors lagged behind:
- Legal services (34.7% slower than baseline)
- Real estate (24.2% slower)
- Accounting (22.8% slower)
- Accommodations (19.1% slower)
- Finance (12.1% slower)
Some of this is cyclical. Higher interest rates have dampened real estate activity, and professional services like legal and accounting often follow broader business confidence with a lag. Still, the uneven recovery underscores an important reality: resilience doesn’t mean ease.
Growth Came With Real Strain
While the topline numbers show resilience, the survey responses reveal the pressure small business owners continue to feel day to day.
- 41% cited higher operating expenses as their top challenge
- 31% struggled with the rising costs of goods sold
- 23% reported cash flow difficulties
Inflation touched nearly every corner of business operations. Four in five business owners say it affected their businesses, forcing 61.3% to raise prices. Others renegotiated supplier contracts or switched suppliers entirely to stay afloat.
And then there’s the human cost—something the data makes impossible to ignore.
Nearly half of respondents (49.2%) say they regularly question whether running their businesses is worth it. More than one in five don’t take a full day off each week, 60.3% delayed paying themselves, and an alarming 77.5% reported making major sacrifices affecting their health, relationships, or financial stability.
These numbers are sobering—and familiar to anyone who is a business owner or spends time talking to them.
What This Data Really Tells Us
The takeaway from Bluevine’s study isn’t just that small businesses grew in 2025. It’s where they grew—and under what conditions.
Entrepreneurship is increasingly happening outside traditional power centers, driven by necessity, opportunity, and a recalibration of what “success” looks like. At the same time, growth doesn’t mean the pressure is off. Small business owners are navigating higher costs, emotional fatigue, and ongoing uncertainty even as they build momentum.
Resilience, it turns out, isn’t about avoiding stress—it’s about moving forward anyway.
And if 2025 proved anything, it’s that small businesses—especially those rooted in communities beyond the biggest cities—are still finding ways to grow, adapt, and show up, even when the road isn’t easy.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo of Indianapolis courtesy Getty Images for Unsplash+
