Houston-area entrepreneurs and small business owners already know this, but the study released today, August 18, 2015 by Thumbtack.com confirms it: Texas is the top state for small business and entrepreneurship, and Houston makes the top ten cities for small business at number seven. Other Texas cities that made the list are Dallas (number two), Austin (number four), and San Antonio (number ten).
The study, Thumbtack’s annual Small Business Friendliness Survey, polled nearly 18,000 small business owners in the United States. Questions asked included rating state and city governments across policy factors. Thumbtack then aggregated the results and evaluated cities and states against over a dozen metrics.
The cities and states that fared best promote local business training and make regulatory compliance easier. Surprisingly, the perception of tax burdens was not as much of a factor in evaluating governments. The survey found:
Taxes are not as important as licensing.
Small business and entrepreneurs were not as concerned about the tax rate as they were about complying with licensing rules. For example, labor rules were 88 percent more important when it came to how friendly a state is to small businesses and entrepreneurs than tax rates.
Licensing needs to be easy and efficient.
As long as the licensing process isn’t complicated, small business owners and entrepreneurs required to be licensed were just as favorable toward their city governments as those that didn’t have to be licensed. However, entrepreneurs and small business owners faced with Byzantine requirements or inconsistent enforcement voiced strong disapproval with city governments.
Training is a top factor in rankings.
When city and state governments offer training to entrepreneurs and small business owners on developing their businesses, the local economy, and dealing with regulations, they ranked higher on the friendliness scale. Training was 78 percent more important to small business owners and entrepreneurs on a city level.
The website really does matter.
Cities and states that invest in high-quality, user-friendly websites with useful information that helps lower the cost of complying with regulations boost their scores. Small business owners and entrepreneurs ranked their cities 13 percent higher on the friendliness scale if the city had a great website.