Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, has released the results from the third annual Thumbtack.com Small Business Friendliness Survey. The study, drawing upon data from over 12,000 small business owners, provides new insights into state and local business environments across the nation.
“Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, but rarely does anyone ask small business owners themselves about what makes for a pro-entrepreneur environment,” says Jon Lieber, Chief Economist of Thumbtack. “Thousands of small business owners across the country told us that the keys to a pro-growth environment are ease of compliance with tax and regulatory systems and helpful training programs.”
Some of the survey’s key findings include:
- Utah, Idaho, Texas, Virginia and Louisiana gave their states the highest rating for friendliness to small business. Small businesses in Colorado Springs, Boise and Houston gave their cities the highest ratings.
- In contrast, small business owners gave California, Rhode Island and Illinois an “F,” while Connecticut and New Jersey both earned a “D” grade. Sacramento, Providence and Buffalo were the survey’s worst-performing cities as rated by their small business owners.
- Small businesses in Texas, Utah and Idaho have rated their states in the top five every year this survey has run, while California and Rhode Island have been rated in the bottom five every year.
- The friendliness of professional licensing requirements was the most important regulatory issue in determining a state’s overall friendliness to small businesses. Closely following licensing requirements was the ease of filing taxes.
- Once again, tax rates was a less important factor than the ease of regulatory compliance in determining the overall friendliness score of a jurisdiction. Two-thirds of respondents said they paid their “fair share” of taxes – that is, they felt like they were neither under-paying nor over-paying.
- Small business owners who were aware of training programs offered by their government were significantly more likely to say their government was friendly to small business than those who weren’t. Awareness of training programs raised overall scores by 10 percent, while 76 percent of those who said they were aware of government-sponsored training programs for business owners ranked their local government as “somewhat” or “very supportive,” and only 8 percent of these said local government was unsupportive.
“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves.”
A copy of the survey’s full methodology and analysis paper is available upon request. Please email Thumbtack’s Chief Economist, Jon Lieber, for a copy of the paper and with any questions or comments you might have.