A report by Thumbtack shows the friendliest places for small business.
A report by Thumbtack shows the friendliest places for small business. Click on map for interactive look.

Looking to start a new business?

You may want to check out Boise or Colorado Springs. Those are among the most favorable cities for small business, according to a new survey released this week by Thumbtack in partnership with the Ewing Marion Kauffman Foundation.

While tech hotbeds such as Seattle and San Francisco may grab headlines, they aren’t quite as friendly to entrepreneurs. Seattle was given a grade of a B minus, while San Francisco got a C minus.

California, meanwhile, received a F grade while Washington state received a C. It ranked poorly in zoning, but got a high score in networking and training programs.

The study was conducted based on the responses of 12,000 small business owners, measuring everything from tax codes to ease of hiring to zoning.

“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,” said 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.”

The top states in the study are Utah, Idaho, Texas, Virginia and Louisiana.

Full report here.


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  • Vroo (Bruce Leban)

    I call BS. There’s a lot of detail missing from this article and the announcement you link to, namely the definition of “friendly” and “unfriendly”. Environmental regulations are a great example — the regulation that prevents one business from dumping waste in a river might be seen as “unfriendly” by that business, but the rest of us would think it a good regulation. And that includes the other small businesses that might rely on that river.

    It’s as bad as asking people if they favor “immigration reform” without defining the term. For one person, reform might mean deporting people more quickly and building barbed wire fences at the border while to another it might mean granting amnesty and making immigration easier. Both people might want “reform,” but they hardly agree.

    • Guest

      I think it’s pretty spot on.
      They asked 12,000 small business owners, who work in the respective locations, their opinion on each of these categories. This is the results of that survey.
      How business owners in any given locale view the business environment friendliness in said locale is *actually* how friendly it is towards business.

      • Vroo (Bruce Leban)

        Actually, they didn’t do that. Look at the actual survey. http://cdn-1.thumbtackstatic.com/media/_survey/friendliness-2014/friendliness_2014.pdf They asked owners of *service provider* businesses to take the survey. There’s nothing wrong with a survey of those businesses, but I doubt it’s representative of the kind of businesses that GeekWire usually writes about.

        They didn’t define what “friendly” means. So, sure, you can tautologically define the survey as measuring friendliness but the results are of no value.

        To give one example, the ease of hiring score is not normalized by industry or local unemployment rate, so a business finding it difficult to hire skilled employees because there aren’t enough of them is scored the same as one that hires seasonal unskilled employees and can’t hire enough of them. Saying the state is unfriendly to hiring in either of these cases is bogus.

        • Jon Lieber

          Thanks for the comment, Bruce. And thanks for taking the time to read our methodology paper.

          I like your suggestion about normalizing for the unemployment rate – certainly the supply of labor is one critical factor that might affect how service professionals think about the ease of hiring. And we’d also love to find a way to expand our survey to include a greater variety of industries – that said, if you look at the comparisons in our methodology paper we do capture a wide variety of the diversity of all small business owners across the U.S..

          We don’t define the word “friendly” in the survey because we wanted to try and understand what our business users think makes for a friendly government. So if you look at the questions we ask what is “helpful” or “unhelpful,” if governments are “supportive” or “unsupportive” or “friendly” and “unfriendly,” and if compliance is “easy” or “difficult.”

          You can read more about the benefits of allowing small businesses themselves to define what works and doesn’t work for them in this short piece from researchers at the Kauffman Foundation: http://www.american.com/archive/2012/may/friending-business

          Thanks again for the comments! We’re always looking for ways to improve our methodology.

  • http://ClaussConcept.com Jason Gerard Clauss

    I’m embarrassed for my home state. The Bay Area needs to break away.

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