Small Business Friendliness Survey: Where in the U.S. Do SMBs Thrive?

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Jon Lieber & Lucas Puente, PhD 2015 Thumbtack.com Small Business Friendliness Survey: Methodology & Analysis

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Survey Overview We polled over 17,000 small businesses on Thumbtack about: The level of support they receive from their state and local governments. Their beliefs about a variety of public policy issues. Information about their background and business.

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Grading Methodology With this information, we assigned grades to 36 states and 95 cities on 11 dimensions: Overall small business friendliness Ease of starting a small business Ease of hiring a new employee Overall regulatory friendliness Availability of helpful training or networking programs Friendliness of: Health and safety regulations Employment, labor, and hiring regulations Tax code Licensing regulations Environmental regulations Zoning regulations

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State Ratings: Overall Friendliness

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Most and Least Friendly Cities and States Top Ten Best-Ranked Bottom Five Worst-Ranked States 1. Texas 2. New Hampshire 3. Utah 4. Louisiana 5. Colorado 6. Idaho 7. Tennessee 8. Virginia 9. Georgia 10. Kansas 1. 2. 3. 4. 5. Rhode Island Illinois Connecticut California New York Cities 1. Manchester, NH 2. Dallas, TX 3. Richmond, VA 4. Austin, TX 5. Knoxville, TN 6. Nashville, TN 7. Houston, TX 8. Fort Collins, CO 9. Boulder, CO 10. San Antonio, TX 1. 2. 3. 4. 5. Hartford, CT Albuquerque, NM Buffalo, NY New Haven, CT Providence, RI

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Research Questions 1. What do small businesses want most from their state and local governments? 2. How do different policy measures affect perceptions about government friendliness?

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Analytical Methodology 1. Use dominance analyses to determine which policies contribute most to friendliness evaluations. 2. Use ordinal logistic regressions to understand how improving policies affects overall friendliness.

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Most Important Policies For States’ Friendliness

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Most Important Policies For Cities’ Friendliness

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Effect of Training Opportunities on Friendliness

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Effect of Government Websites on Friendliness

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Effect of Licensing Compliance on Friendliness

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Regulation & Overall Friendliness The Effects of Regulatory Friendliness on Overall Friendliness:

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Other Factors’ Effects on Friendliness

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Conclusions 1. Government activity can help. 3 effective ways to improve friendliness: Offer helpful training programs. Provide easy to use websites. Facilitate licensing compliance. 2. Regulations affect overall friendliness across the board. 3. Tax rates and complexity matter, but are among the least important factors to small businesses.

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