Top Locations for New Businesses

Share this:

A report from Thumbtack’s Small Business Friendliness Survey reveals the best places to start businesses in the United States. The website provides services to connect customers to local professionals. Thumbtack’s business owners range from a variety of industries, such as home improvement, weddings and events, and wellness.

The results of the survey were based on responses from entrepreneurs, small local businesses and sole proprietors who use the site’s online marketing platform. This study has surveyed thousands of users since 2012 to assess concerns regarding policies as well as state and local governments.

Thumbtack looked at a variety of factors to measure the ease for individuals to start new businesses in different states and cities. According to the survey, high-ranked cities are ideally low-cost and require fewer steps for startups to launch. A city’s resources and attitudes toward entrepreneurship and regulations also affected user ratings.

Jon Lieber, Thumbtack’s chief economist, notes that southern states typically have a high-performance on the site’s annual survey. This could be due to their governments’ efforts to appeal to businesses or their flexibility on rules, such as consumer protection policies. Lieber further highlights locations that performed well in specific categories. For instance, cities such as, Birmingham, Alabama, and Richmond, Virginia, ranked high for businesses aiming to hire new employees. Kansas, Alabama, and Utah are the top states for hiring.

Thumbtack also considered other factors that likely contributed to the survey results. Regarding hiring, certain rules and regulations can complicate or ease the process. Paid sick leave, for example, makes hiring more difficult for small businesses. In this case, as Lieber summarizes, the small businesses need to “track hours to know how much time an employee has accrued.” Additionally, while conducting the survey, Thumbtack kept in mind that some businesses hire private contractors or 1099-form employees to avoid the restrictions of employment regulations.

The top two friendliest states from the report include Texas and New Hampshire. These states are also the homes of the top friendliest cities, Manchester, New Hampshire, and Dallas, Texas. Thumbtack reveals the collective grades from small business owners across the U.S. As the highest ranked state, Texas has a high economic output. The survey gives the state an A+ for “Overall Friendliness” and a lower grade of a B for “Ease of Hiring.” Following Texas, New Hampshire received an A+ for “Ease of Starting a Business.” The second highest state received a lower grade of a B- for “Environmental.”

Craig Hayes of Scribble Creative Group, LLC, located just outside of Manchester, N.H., agrees with the Thumbtack analysis of New Hampshire. “We are seeing a substantial growth of N.H. based businesses looking to build their web presence on a national level. New Hampshire is a state that works incredibly well for building a business to succeed both on a local and national level”, says Craig on an early morning conference call. “Manchester is turning into a vibrant city with smart companies and talented business owners… I foresee a great deal of future growth in the tech and manufacturing markets.”

Thumbtack’s rankings for the top ten states and cities for overall friendliness towards small businesses are below. To read more details from the report and its rankings, view the survey results here.

Top Ten States for Overall Friendliness