Best & Worst States for Small Business According to U.S. Entrepreneurs
A CommPRO News Update
In a period of declining business startups in the United States, the fifth annual Thumbtack Small Business Friendliness Survey offers insights about what governments can do to support entrepreneurship and reverse the tide. Skilled professionals say the most important factor affecting their success and ability to start, grow and sustain a thriving business is regulation that is straightforward and easy to follow - not overly simplistic fixes like lower tax rates.Conducted since 2012, the Thumbtack Small Business Friendliness Survey is the largest continuous study of small business perceptions of government policy in the United States. In 2016, more than 12,000 U.S. respondents participated in the survey, allowing Thumbtack to create a side-by-side ranking of 35 states and 78 cities. All 2016 survey data are hosted in an interactive visualization at https://www.thumbtack.com/
“Skilled professionals on Thumbtack report that when government regulations complicate obtaining licenses and permits, hiring employees, and paying taxes, it is harder to start and grow a business,” said Lucas Puente, economist at Thumbtack. “The highest-rated governments make regulations easy to comply with and enforce them consistently. They also invest in helpful training programs and government websites. These insights provide a road map for policy makers to create environments that foster entrepreneurship and innovation-outcomes critical for continued economic growth.”
Best and Worst Climates for Skilled Professionals
| States | Cities | |
| Top TenBest-Ranked | ||
| Bottom FiveWorst-Ranked |
Key Drivers of Business Friendliness
Skilled professionals who found their governments to be friendly for small businesses were most likely to rate them highly on licensing requirements, tax regulations, and labor and hiring rules. These policies have consistently ranked among the top concerns for businesses since 2012.In 2016, the influence of each of these factors in driving grades depended on the level of government. Perceptions of licensing friendliness were more important for city rankings because local municipalities and counties are often more responsible for licensing, permits and other forms and fees to run a business.
Top Policy Concerns for Small Business Owners, Based on Government Level
| Rank | Local government | State government |
| 1 | Licensing Requirements | Tax Regulations |
| 2 | Tax Regulations | Licensing Requirements |
| 3 | Labor Regulations | Labor Regulations |
Survey Methodology
Between April 13, 2016 and May 6, 2016 Thumbtack surveyed 12,169 skilled professionals from across the United States, operating across hundreds of categories, including as electricians, music teachers, wedding planners, wellness professionals, and more. The survey asked these entrepreneurs about the policies of their states and cities toward small business, as well as the overall level of support in their community.Visit https://www.thumbtack.com/
