The consumer service organization, Thumbtack, and the private, nonpartisan Ewing Marion Kauffman Foundation, recently released the third annual Thumbtack.com Small Business Friendliness Survey.
Idaho, Louisiana, Texas, Utah and Virginia came out on top as most small business friendly based on responses from more than 12,600 small business owners nationwide. The least friendly states were California, Rhode Island and Illinois.
Small business owners were asked to rate their states for overall friendliness. But they also were quizzed on issues such as ease of starting a business and hiring employees; tax codes; meeting license requirements; zoning and environmental regulations; and awareness of government-sponsored training programs.
Most states and 82 cities received letter grades from A+ to F. Among cities Colorado Springs, Boise and Houston had the highest grades. Sacramento, Providence and Buffalo were at the bottom.
“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,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation.
The most important issue for small business owners was business-friendly licensing regulations. A close second was the ease of filing taxes.
Tax rates were the least important factor with about two-thirds saying they were taxed fairly, meaning rates were neither too high nor too low.
Many small business owners who gave high marks for overall friendliness said their states did a good job informing them about government-sponsored training programs. In some cases, those views increased a state’s overall friendliness rating by 10 percent.
According to The Business Journals, the survey also found that 19 percent of small business owners were not prepared to implement the Affordable Care Act.
Female business owners were more likely than males to say state governments were friendly to big businesses. But males were more likely to express a positive outlook of their states’ economies.
Texas, Utah and Idaho each received an A+ and have placed in the top five each year since the survey’s inception. Their best scores varied by category, however, with Texas best in zoning; Idaho in employment labor and hiring; and Utah in overall friendliness.
F grades went to California, Rhode Island and Illinois with California and Illinois slipping from their D grades in 2013. California and Rhode Island have been in the bottom each year of the survey and received their worst ratings in employment hiring and labor. Illinois was worst in overall friendliness.
Connecticut and New Jersey scored D grades.
