Who is Really Small Business Friendly?

April 02, 2013

A Thumbtack.com survey of 7,000 small businesses, highlights who’s really on the side of the small business owners.

The question is not, are we friendly to small business, but how can we be friendlier?  Although this is a common refrain of business and political leaders across the US, the new Thumbtack.com Small Business Survey shows that experiences can vary widely at both the state and city levels. The Thumbtack survey of 7,000 small business, produced in partnership with the Kauffman Foundation, is notable for it’s focus on specific regulations, like licensing and permitting, that most small business have to deal with, often in multiple regimes.  Over 25% of small businesses surveyed were subject to licensing regimes at the city, country, state and federal levels – that’s a lot of red tape.

So where should you start your small business? It’s probably not as easy as just picking a state, there’s the local market, your product and a ton of other factors to consider as well.  But, if you’re currently considering a possible location move, the Thumbtack survey results might help jumpstart or validate your research.  Alabama, Idaho and Utah all got top marks (A+), while New England was a mixed bag – New Hampshire was tops (A+), while Rhode Island (F) was at the bottom.  And for anyone looking to realize their dream of opening up a surf shop or seashell stand on the beach, be warned that Hawaii (F) also came in at the bottom in terms of overall small business friendliness. Is there a city for me? The large impact of local and country level regulations on small businesses means that the city can play an even bigger role than the state in terms of small business friendliness.  Some of the old line Northeast cities got the middling grades you would expect – New York (C), Newark (F), Boston (C+) – and California cities aren’t exactly rolling out the welcome mats for small businesses either – Los Angeles (D), Sacramento (F), San Diego (F).  In terms of bigger states, Texas looks like the place to be for bourgeoning small business owners - Austin (A+), Dallas (A), San Antonio (A+). If you are starting a business in one of these cities find out how Hiscox can help you protect it. Some interesting findings.  Read the whole report for more details, like the fact that over half of small business owners think their tax levels are “about right”.