Texas, Utah Rank High as Small Business Friendly States, Survey Says

Texas, Utah Rank High as Small Business Friendly States, Survey Says

Running a company successfully is a challenge no matter where you are located, but in some business-friendly cities and states entrepreneurs have a relatively easier time.

Small Business Friendly States and Cities

According to a new study by Thumbtack, San Antonio and Nashville are the friendliest cities to small businesses.

Among the states, Texas and Utah are the top favorites. Connecticut and Illinois, on the other hand, fare poorly as they are deemed the least friendly states for doing business. Syracuse and Oxnard are the worst ranked cities.

Participants said the most important factor impacting their success and ability to start, grow and sustain a thriving business is regulation that’s straightforward and easy to follow.

Key Drivers of Business Friendliness

Professionals who found their governments to be small business-friendly were most likely to rate them positively on tax regulations, licensing requirements and labor and hiring rules. That’s because these factors have consistently ranked among the top concerns for businesses since 2012.

In this year’s survey, the influence of these factors depended on the level of government.

Perceptions of licensing friendliness were more critical for city rankings because local authorities are often more responsible for permits, licensing and other forms to run a business.

“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,” Lucas Puente, economist at Thumbtack told Small Biz Trends.

“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 roadmap for policy makers to create environments that foster entrepreneurship and innovation-outcomes critical for continued economic growth.”

About the Survey and Thumbtack

Thumbtack is an online platform dedicated to connecting local small businesses with customers. Those businesses range from plumbers and house painters to therapists and more. Businesses are able to compete for customers interested in their services via the use of a bidding system.

The annual Thumbtack Small Business Friendliness Survey has been conducted since 2012. For this year’s study, Thumbtack surveyed more than 12,000 U.S. small business owners who collectively graded 35 states and 78 cities on the government policies that impact their businesses.

To mark the fifth anniversary of the survey, Thumbtack also released a special report highlighting the top policy concerns for skilled professionals with in-depth case studies of five cities from five different regions: Austin, Atlanta, Boston, Minneapolis and San Francisco.

Photo via Thumbtack

More in: 3 Comments ▼

Shubhomita Bose Shubhomita Bose is a Staff Writer for Small Business Trends. She covers key studies and surveys about the small business market, along with general small business news. She draws on 8 years of experience in copywriting, marketing and communications, having worked extensively on creating content for small and medium sized enterprises.

3 Reactions
  1. Lived in Utah for over 10 years. State government prioritizes businesses and educated workforce makes for good talent pool. Not surprised to see them rank well.

    • Well, that’s great. Hoping other states will follow their lead. Thanks for your comment, Robert.

  2. How did New Hampshire and Ohio do in the competition with the other states? I studied in NH and worked in OH, 1997 – 2002.

    It is interesting to see that Utah is in the top. I am independent distributor of products for a company with HQ in Utah.