Thumbtack.com surveyed 17,633 small businesses across the United States. The 36-question survey asked about the friendliness of states and cities toward small business, including specific questions about the regulatory environment for labor, tax, and licensing rules. Thumbtack.com evaluated states and cities against one another along more than a dozen metrics. Respondents to the survey were largely very small service businesses with five or fewer employees. Every state in the country was represented, although only states with more than 50 responses and cities with more than 30 responses were given a grade. For more, see thumbtack.com/survey.

1. Jon Lieber &
Lucas Puente, PhD
2015 Thumbtack.com Small
Business Friendliness Survey:
Methodology & Analysis

2. Survey Overview
We polled over 17,000 small
businesses on Thumbtack about:
The level of support they receive from
their state and local governments.
Their beliefs about a variety of public
policy issues.
Information about their background and
business.

3. Grading Methodology
With this information, we assigned grades
to 36 states and 95 cities on 11 dimensions:
Overall small business
friendliness
Ease of starting a small
business
Ease of hiring a new
employee
Overall regulatory
friendliness
Availability of helpful
training or networking
programs
Friendliness of:
Health and safety
regulations
Employment,
labor, and hiring
regulations
Tax code
Licensing
regulations
Environmental
regulations
Zoning regulations

4. State Ratings: Overall Friendliness

5. Most and Least Friendly Cities and States
States Cities
Top Ten
Best-Ranked
1. Texas 1. Manchester, NH
2. New Hampshire 2. Dallas, TX
3. Utah 3. Richmond, VA
4. Louisiana 4. Austin, TX
5. Colorado 5. Knoxville, TN
6. Idaho 6. Nashville, TN
7. Tennessee 7. Houston, TX
8. Virginia 8. Fort Collins, CO
9. Georgia 9. Boulder, CO
10. Kansas 10. San Antonio, TX
Bottom Five
Worst-Ranked
1. Rhode Island 1. Hartford, CT
2. Illinois 2. Albuquerque, NM
3. Connecticut 3. Buffalo, NY
4. California 4. New Haven, CT
5. New York 5. Providence, RI

6. Research Questions
1. What do small businesses want
most from their state and local
governments?
2. How do different policy measures
affect perceptions about government
friendliness?

7. Analytical Methodology
1. Use dominance analyses to
determine which policies contribute
most to friendliness evaluations.
2. Use ordinal logistic regressions to
understand how improving policies
affects overall friendliness.

8. Most Important Policies For States’ Friendliness

9. Most Important Policies For Cities’ Friendliness

10. Effect of Training Opportunities on Friendliness

11. Effect of Government Websites on Friendliness

12. Effect of Licensing Compliance on Friendliness

13. Regulation & Overall Friendliness
The Effects of Regulatory Friendliness on Overall Friendliness:

14. Other Factors’ Effects on Friendliness

15. Conclusions
1. Government activity can help. 3 effective
ways to improve friendliness:
Offer helpful training programs.
Provide easy to use websites.
Facilitate licensing compliance.
2. Regulations affect overall friendliness
across the board.
3. Tax rates and complexity matter, but are
among the least important factors to
small businesses.

16. thumbtack.com/survey