LA or NY? The City of Angels vs. The Big Apple. This long-standing question has consistently served as a hot topic for debate, founded years ago when the first journalist, aspiring director, and actor all tossed their mortarboards into the air at their communications school’s commencement. Some will inevitably pack up their wagons and blog/publicly document the cross-country adventure to Los Angeles [Thank you to all who fit this description; I hung onto every word and waited anxiously by my computer for new photos to appear]. Others find that New York is more their style and pace, whether it be a result of growing up on the east coast, friends or landing that coveted magazine internship. I have been lucky [or unlucky] enough to experience living in both cities before the ripe old age of 24, which undoubtedly makes me the most qualified person on the Internet to discuss such a subject.
Both cities are highly respected moves because, let’s face it – If you have recently graduated and dad is unable to invest in a Soho loft for you and Toto, affording New York or Los Angeles is no easy feat. These are two of the most expensive cities in the world and us 20-something go-getters are being flattened before we can fully stand up. You may have been valedictorian of the Springfield High Class of 2007 but now you, your roommates and your five closest friends will soon be unpaid interns at Sterling Cooper Draper Cheap.
So which is “better”? Well, what exactly do we mean by better? Better weather? LA wins. End of article.
In this instance, I’m referring to which may be more economical for small businesses. After backpacking through Europe and seeing Dave Matthews Band five times a year during your 20s, the finances will eventually accumulate and many entrepreneurial spirits embark upon the lifelong journey known to some as “Oh, it’s just a hobby” and others as “I have a child to feed.” I am of course referring to owning and operating a business. However, the economy is miserable and the competition is fierce, making it increasingly difficult to remain alive in 2012.
There are certainly pros and cons to starting your business in each city, including state taxes, the cost of living and local competition, but let’s dig a bit deeper and compare these factors:
Competition: Although tech start-ups and media companies comprise a large portion of said small businesses, let’s first put restaurants under the microscope. In 2010, approximately 1,000 restaurants opened in New York. According to documentary Eat This New York, 800 of them [or 80%] will go out of business within five years. In my experience, New York is so densely populated that the competition here is outrageous. Though the small island of Manhattan is a cozy home to over 190,000 small businesses, LA and its widespread landscape is home to over 215,000 small businesses. Los Angeles also contains 1 million more residents, thus inspiring more competition.
Winner: New York
Quality of Life/Geographic Location: In recent news, geographic location may prove a major detriment to businesses. Exhibit A: Hurricane Sandy. Her name describes our opposing city, but certainly hit the tri-state area like a ton of bricks. Not only were many businesses without power for more than a week, but also employees of businesses with power were unable to commute due to a lack of gas and subway shutdowns. After approximately $50 billion in losses, over 1,000 businesses were forced to apply for loans. In Los Angeles, on the other hand, people seem completely unfazed when earthquakes roll through. The quality of life is also much higher than in New York. On the downside, Hollywood is now competing with places like Morocco, Louisiana and North Carolina for filming locations. For this particular industry, location may not be as ideal as it was in the past.
Winner: Los Angeles
Leadership/Personnel: Los Angeles residents are often more relaxed, laid back and eager to bounce at 5PM for surfing lessons and yoga class. We could pull statistics on types of leaders and ways to improve the efficiency of your business, but it would simply not relate back to the difference between LA and New York. In my experience, which may be different from another reader’s, LA offices tend to start late and pack up early. Also, co-workers are more likely to discuss evening/weekend plans instead of work; it’s truly: “work to live” rather than “live to work”. New York seems to portray the opposite. Another drawback for LA is the traffic. The absurd traffic in this city can and will ruin your day. Raise your hand if your mood and potential work performance has been affected by… Yup. See? I may have brought on a migraine imagining the possibility.
Winner: New York
Taxes: “I would love to pay more in taxes.” – No one. Before Prop 30 passed, California ranked fourth in state-local tax, second in personal income tax rate and first in sales tax. The proposition will raise these even further. Although the main stipulations increased sales tax and taxes for the wealthy, small business owners were somewhat overlooked. Based on earnings and the personal income tax schedule, business taxes will soar for some and force companies into an early grave. However, 24/7 Wall Street recently identified New York as the state taxing their residents the most. Residents pay a whopping rate of 12.8% of income! Alongside federal and state, New York City folk pay an extra local, or city, tax. Supposedly, the property taxes are also outrageous! I do not <3 NY. I’m going to throw my t-shirt, which I paid an excessive sales tax on, in the garbage.
Winner: Los Angeles
Cost of Living: My nose would extend to the other side of this room if I said I had never walked into a New York City apartment and immediately wanted to know how much the tenants were paying for rent. Earlier this year, the Council for Community and Economic Research conducted a study that determined New York to have the highest cost of living in the country. Of ten cities, the boroughs of Queens, Brooklyn and Manhattan all rank in the top ten with Manhattan at #1. With minimum wage at $7.25 an hour, average rent for one-bedroom apartments at $2,568 a month, and two bedrooms averaging $3,187, a full timer in NYC will be able to afford a piece of cheese and a broccoli crown. That is a mathematical fact. Granted this is often not a business owner’s situation, but you can understand the high cost of living. LA [$1,346/mo. for 1 bedroom & $1,808 for 2 bedroom] is statistically lower.
Winner: Los Angeles
Vitally important factors such as technology and marketing are not as noteworthy for contrast. Though companies with less money will have difficulty upgrading to the latest technological innovations, this seems to be even across the board everywhere. Similarly, marketing and advertising tools [such as, I don’t know … Get Busy Media] are regularly made available all over the web and because of that, both cities have an advantage.
While we’re only scratching the surface, several bits and pieces have now come into focus. California and New York each possess traits that the other city will never or may never acquire and the surprising pros and alarming cons will force business owners to contemplate their futures:
Have I chosen the right location? Will I be able to maximize profits where my business stands? Can I succeed and become profitable in the geographic region of my choice? How does my business compare to those in the opposing location of similar demographics?
Give it five years. Be sure to differentiate yourself. Hope for growth, employ those go-getters and anticipate the worst but strive for the best.
Photo Credit (feature image) - http://www.hipstercrite.com/2012/04/12/nyc-vs-la-according-to-music-which-city-is-the-saddest-and-loneliest/