Skip to content
Subscriber Only

Grading States on Small-Business 'Friendliness'

All else being equal, would-be entrepreneurs should consider moving to Idaho, Texas, Utah, or Virginia, and fleeing California, Illinois, and Rhode Island. The first four states received A+ grades for small-business “friendliness” in a study published this week by local services startup Thumbtack and the Kauffman Foundation. The last three states got Fs.

The research, based on more than 12,000 completed surveys, asked respondents to grade their cities and states on the ease of starting a business and hiring workers, the fairness of the tax code, and the impact of government regulation. Beyond the letter grades, the survey yielded some interesting results. The complexity and cost of obtaining business licenses was the most important issue for business owners. The bigger a business gets, the more owners are likely to believe they pay too much in taxes. Black business owners were more likely than whites to give their states high scores for being favorable to small business.