Texas, New Hampshire and Utah are the friendliest states to small businesses while New York and California rank among the least friendly, according to the fourth annual Small Business Friendliness Survey, which also found that state and city tax burdens rank low in how entrepreneurs gauge this friendliness.
State and city governments that promote local business training and focus on ease of regulatory compliance are viewed as the friendliest to small business, according to the survey, conducted by technology-based marketplace Thumbtack.
More than 17,000 surveyed U.S. small business owners were asked to rate their state and city governments on a range of policy factors that Thumbtack used to evaluate the states and cities against other and along more than a dozen metrics.
“Small business owners on Thumbtack have consistently told us that they welcome support from their governments but are frequently frustrated by unnecessary bureaucratic obstacles,” stated Jon Lieber, chief economist of Thumbtack. “Given that there is a crisis of entrepreneurship in the United States, seen in the broad collapse of self-employment across industries and states, creating the right environment for business start-ups is more important than ever.”
The three key drivers of business friendliness for state governments, according to the surveyed entrepreneurs, are training experience and tax and labor regulations. In rating city friendliness, respondents also valued training experience, along with licensing regulations and website experience.
Labor rules were 88 percent more important in driving state friendliness scores when compared to tax rates.
According to these factors of friendliness, the top ten states with the best climate for small business are:
2. New Hampshire
The top ten best ranked cities are:
1. Manchester, N.H.
2. Dallas, Texas
3. Richmond, Va.
4. Austin, Texas
5. Knoxville, Tenn.
6. Nashville, Tenn.
7. Houston, Texas
8. Fort Collins, Colo.
9. Boulder, Colo.
10. San Antonio, Texas
The worst ranked states and cities are:
1. Rhode Island
5. New York
1. Hartford, Conn.
2. Albuquerque, N.M.
3. Buffalo, N.Y.
4. New Haven, Conn.
5. Providence, R.I.
Thumbtack surveyed 17,633 small businesses across the United States with 36 questions, then evaluated states and cities against each other along more than a dozen metrics. More information on the survey methodology and results can be found here.
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