A new survey of small business friendliness in the nation’s states has dropped Connecticut’s overall grade from D+ to D, and given the state a failing grade in seven of eleven small business friendliness categories. The grades dropped as compared with last year's survey. Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, released the third annual Small Business Friendliness Survey showing that small business owners in Utah, Idaho, Texas, Virginia and Louisiana gave their states the highest rating for friendliness to small business. In contrast, small business owners gave California, Rhode Island and Illinois an "F," while New Jersey joined Connecticut in earning a "D" grade.
More than 12,000 entrepreneurs nationwide participated in this year's survey - the largest of its kind and the only survey to obtain data from an extensive, nationwide sample of small business owners to determine the most business-friendly locations.
The survey ranked states on specific categories, including: the ease of starting a business, ease of hiring, state and local business regulations, health & safety regulations, employment, labor & hiring regulations, tax code and tax-related regulations, licensing forms, requirements and fees, environmental regulations, zoning and land use regulations, and the availability of training & network programs for small business owners.
Connecticut received a B in two categories: ease of hiring and training & network programs, and a D in one: ease of starting a business. In all other categories, Connecticut received an F for small business friendliness.
Some of the key findings for Connecticut, according to the survey of small business owners:
- Connecticut received a D for its friendliness towards small business, one of the worst grades in the country.
- Connecticut received the worst grade in the nation for its regulatory friendliness.
- The state rated in last place for its health and safety, licensing, environmental regulations, and zoning laws.
- Small businesses in Connecticut had the second worst outlook for the national economy of any state.
- Female entrepreneurs in Connecticut rated the friendliness of their state government 9 percent higher than their male counterparts.
In last year’s survey, Connecticut did not receive a single grade of “F.” The state’s overall grade was D+, and included an A in training & networking, B in ease of hiring, and B- in health & safety regulations. Other grades were D+, C- and C. In the first survey conducted, in 2012, Connecticut’s overall grade was D, and the state was not graded F any category.
"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," says Jon Lieber, chief economist of Thumbtack.com. "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."
Some of the survey's key findings include:
- 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.
- The friendliness of professional licensing requirements was the most important regulatory issue in determining a state's overall friendliness to small businesses. Closely following licensing requirements was the ease of filing taxes.
- Once again, tax rates were a less important factor than the ease of regulatory compliance in determining the overall friendliness score of a jurisdiction. Two-thirds of respondents said they paid their "fair share" of taxes – that is, they felt like they were neither under-paying nor over-paying.
- 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.