Growth Strategies

Rating the Best -- and Worst -- States to Do Business

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Rating the Best and Worst States to Do Business

How business friendly is the place you've set up shop? A new report rates the business climate of states and counties across the U.S., based on a survey of business owners.

The report, from 2012 Thumbtack.com Small Business Survey, presented in partnership with the Kauffman Foundation, offers a roadmap -- quite literally -- of the friendliest places to conduct business in the U.S., on a website that enables visitors to check the business climate “score” of any county in any state.

For instance, Idaho, Texas, Oklahoma and Utah all earned A+ scores in rankings for states most friendly to small businesses. On the bottom end of the report card are California, Hawaii, Vermont and Rhode Island. Each received failing grades.

The survey asked about tax rates, simplified licensing regulations, zoning laws, environmental constraints, and established training and networking programs.

Having recently attended a conference in Greenville, S.C., I was most interested to see how the northern area of the Palmetto State fared. I'd witnessed first-hand how this TechStars/Global Accelerator Network-city caters to start-ups and small businesses.

I wasn't surprised to see “Upstate” South Carolina receive a B+. Entrepreneurs and start-ups in Greenville aren't only aware of locally inspired training programs for small businesses, but many take advantage of them.

The scene was a far cry from the business atmosphere here in my adopted state of California. Sure, I look out my living-room window and see the sunshine and the Pacific Ocean, but the Golden State does few favors for the small-business owner, according to the survey. It reports that the three worst cities for small businesses are located here: Los Angeles, San Diego and Sacramento.

Below are some other findings from the report:

  • Idaho, Nevada and Delaware boast the most small-business-friendly tax codes, with California and New Mexico offering the least friendly.
  • The southern portion of the US. is the most friendly to small businesses and New England is the least.
  • Small business owners in Nebraska are the most likely to believe things will improve for their enterprise this year. Those in Iowa are the least.

This study probably isn’t going to persuade any of you to pack up and move, but it does serve as a means of taking a closer look at what doesn’t work in your region and discovering another area where the issue was resolved.

How do you rate your state and county's friendliness to small businesses? Let us know in the comments below.

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