Launching a small business is fraught with challenges no matter where an entrepreneur sets up shop, but some U.S. states are better for business than others, a recent study found.The survey, conducted by Thumbtack, a professional service firm, and the Ewing Marion Kauffman Foundation, ranked states by overall industry friendliness, ease of hiring and ability to start a business. More than 12,000 entrepreneurs across the country participated in the study, which also ranked 82 cities according to their business climate.
The survey assigned grades of A through F, and found Idaho, Texas, Louisiana, Virginia and Utah were rated highest for business friendliness, each earning a grade of “A” or “A+,” while Houston, Colorado Springs, Colorado, and Boise, Idaho topped the list of best cities for entrepreneurs.
On the other hand, entrepreneurs gave each Rhode Island, Illinois and California an “F.” New Jersey and Connecticut did not fare much better, each earning a grade of “D,” and Sacramento, California, Providence, Rhode Island, and Buffalo, New York rounded out the list of worst cities for business owners.
Regulatory restrictions, tax issues top concerns for business owners
These findings come in opposition to the fact that many consider small business success imperative to creating a robust U.S. economy. This success relies upon a strong business climate and tax and regulatory systems operating in favor of entrepreneurs. Jon Lieber, chief economist at Thumbtack, expanded on this point.
“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,” Lieber said. “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.”
Ease of meeting licensing requirements was cited as the most vital regulatory obstacle to overcome when ranking states for their attitudes toward entrepreneurs. Following soon after on the list of challenges was the expediency with which business owners could file and process taxes. Each of these considerations weighed heavily on entrepreneurs across the country – 18 out of 39 states studied earned a rating of “C+” or lower.
With so many states ranking low on the list of those with business friendly environments, many entrepreneurs may find themselves struggling to make ends meet. Business leaders who are trying to keep their business running smoothly should contact National Funding to find out more about small business loans and other financial options.
