Midmarket Companies Rank Utah, Idaho as Friendliest to Business

Businesses in Colorado Springs, Boise and Houston gave their cities the highest ratings, while Sacramento and Providence were the worst performing.

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Small business owners in Utah, Idaho, Texas, Virginia and Louisiana gave their states the highest rating for friendliness to small businesses, according to the third annual Small Business Friendliness Survey, conducted by consumer services specialist Thumbtack, in partnership with the Ewing Marion Kauffman Foundation.

Small businesses in Colorado Springs, Boise and Houston gave their cities the highest ratings, while Sacramento, Providence and Buffalo were the survey’s worst performing cities as rated by their small business owners.

Perhaps unsurprisingly, two of the states where those three cities are located—California and Rhode Island—received an overall "F" grade, along with Illinois. New Jersey and Connecticut didn’t fare much better, pulling a lowly "D" grade.

"It is critical to the economic health of every city and state to create an entrepreneur-friendly environment," Dane Stangler, vice president of research and policy at the Kauffman Foundation, said in a statement. "Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves."

Small businesses in Texas, Utah and Idaho have rated their states in the top five every year this survey has run, while California and Rhode Island have been rated in the bottom five every year. Kentucky’s grade was this year’s most improved, jumping from a B- to an A.

Small business owners who were aware of training programs offered by their government were significantly more likely to say their government was friendly to small business than those who weren’t.

Awareness of training programs raised overall scores by 10 percent, while 76 percent of those who said they were aware of government-sponsored training programs for business owners ranked their local government as "somewhat" or "very supportive," and only 8 percent of these said local government was unsupportive.

The survey also revealed female entrepreneurs were more likely than male entrepreneurs to say that their state government was friendly to small business, while male entrepreneurs were more likely than female entrepreneurs to have a positive view on the outlook of their state economy.

"Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, but rarely does anyone ask small business owners themselves about what makes for a pro-entrepreneur environment," Jon Lieber, chief economist of Thumbtack, said in a statement. "Thousands of small business owners across the country told us that the keys to a pro-growth environment are ease of compliance with tax and regulatory systems and helpful training programs."

More than 12,000 entrepreneurs nationwide participated in this year’s survey, which ranked 82 cities and most states on what makes a positive environment for small businesses.