But instead of heading to a more populous city, she located the firm in the Triangle, where she previously had owned a business.

"This is where I chose to come, and thank goodness, because it's paid off," says Espy, whose Raleigh-based firm helps clients lease, purchase, build and equip commercial space. "I think it's a good base of operations."

Espy's endorsement of the area's small business mojo is backed up by a new study from American City Business Journals that rates the Raleigh-Cary market as the No. 7 market in the country in terms of small business vitality.

The study examined 931 metro areas, which were broken down into three categories: large, medium and small. Raleigh was one of 91 in the large market category, which included areas with more than 500,000 residents.

ACBJ, which is Triangle Business Journal's parent company, defined a small business as any company that has fewer than 100 employees.

The study was based on data collected in 2002, the latest figures available, by the U.S. Census Bureau. ACBJ considered several components in calculating the rankings, including the following:

Relative to those criteria, Raleigh-Cary had:

Portland, Maine, was the top large market in the study, while Bend, Ore., was the No. 1 medium market. The ACBJ study ranked Bozeman, Mont., as the best small market in regards to small business vitality.

Kill Devil Hills on the Outer Banks was the only other North Carolina community to make the top 10 list in any of the three categories, placing No. 2 among small markets. Durham ranked No. 149 in the medium market list, putting it in the company of Pittsfield, Mass. (No. 148) and Springfield, Ill. (No. 150).

"We tend to watch each other's back and open doors for each other," says Espy, whose company employs four people full-time.

A centralized location on the East Coast is another feather in the Triangle's entrepreneurial cap, as is the quality of life.

"It's one of those communities ... that people want to live in," says Reid Tripp, vice president of business at Metabolon Inc., a Durham biotechnology company with 17 employees.

But Raleigh's impressive ranking in the ACBJ study doesn't mean there aren't drawbacks to the area. Small business people say obtaining funding remains a challenge. Venture capitalists are more gun shy since the recession, say Espy and Jason Caplan, the chief executive of Raleigh-based EnSolve Biosystems Inc.

"There doesn't seem to be a whole lot of money for startup companies," says Caplan, whose six-employee firm develops products to remove hazardous wastes from water.

Small businessman Dave Mangrum says it would be nice if there were more aggressive investors available to fill a funding void between VCs and banks. Mangrum, the co-owner and chief financial officer of Iatria Day Spa, says banks are incredibly conservative when it comes to lending money to small businesses.

He says he has been frustrated in trying to get capital from the banks to open two new day spa locations. "In some ways, we've had to temper our growth a bit based on that," Mangrum says.