Is Your State Small Business Friendly?

successful business owner
Every state likes to have a thriving, vibrant small business sector to help bolster their economy. Most states try to attract those that comprise “the backbone of the economy” by offering tax incentives and other benefits, aiming to help them navigate through an era with a large presence of international franchises. But, as it turns out, some states are better at hosting small-scale companies than others.

According to the Small Business Friendliness Survey,
small business owners are the most content in the Midwestern and Southern states. The report cites a survey carried out by Thumbtack and the Ewing Marion Kauffman Foundation that polled 12,000 small business owners in 38 different states. The survey included questions regarding the easiness of starting and growing a small enterprise in their given state of operation.

The top ten friendliest states to small businesses are as follows:

  1. Utah

  2. Idaho

  3. Texas

  4. Virginia

  5. Louisiana

  6. Tennessee

  7. Oklahoma

  8. Colorado

  9. Kentucky

  10. Georgia

John Lieber, Thumbtack’s chief economist, remarked, “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 chief concern that small business owners had about their state’s legal policies is the relative level of facility granted to entrepreneurs while obtaining the necessary licensing for conducting their operations.

Aside from Texas, the country’s most populated states did not fare too well in the survey measuring the relative happiness of small business owners with their state’s policies. On an A-F grade scale, California and Illinois received F’s (California is also ranked last on a list of states with the best small business tax systems compiled by the Small Business and Entrepreneurial Council). Pennsylvania, New York, New Jersey, and Massachusetts were marked either a D or a D+, while Ohio, Michigan, Florida, and Missouri were rated between a C- and a C+.

Nearly all of the complaints that were heard had to do with legal restrictions that hampered an organization’s ability to grow. States with such restrictions face an uphill battle trying to make small-business owners happier. Ameliorating the problem by removing legislation can be remarkably difficult, seeing as nearly all of such constraints were put in place in order to help those in a different sector of the economy. Business Insider suggests that the only way for states to become more congenial towards small businesses is to limit and slow the passage of new restrictions.