Colorado Springs, Colo., Boise and Houston are the friendliest cities in the country for small business owners.


That’s according to the Thumbtack.com Small Business Friendliness Survey. The study, in partnership with the Ewing Marion Kauffman Foundation, collected data from over 12,000 small business owners, asking how they ranked their cities and states on several factors including regulatory hurdles, the availability of training and networking programs and the ease of starting a new business.

The three aforementioned cities were found to be the most friendly, while Utah, Idaho, Texas, Virginia and Louisiana were the most-accommodating states. In contrast, California, Rhode Island, Illinois, Connecticut and New Jersey were the least-friendly states. Sacramento, Providence, and Buffalo, N.Y., were the least-friendly cities.


In the three years the survey has run, small businesses in Texas, Utah and Idaho have rated their states in the top five every year, while California and Rhode Island have been rated in the bottom five every year.

The most important regulatory issue to the small businesses owners surveyed was the ease of professional licensing requirements. Closely following licensing in importance was the ease of filing taxes. 

A jurisdiction’s tax rate was found to be a less important factor than the ease of regulatory compliance in determining the overall friendliness of a city or state. 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.

"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."

To receive a full copy of the report, or to voice questions or concerns, email Thumbtack’s Chief Economist, John Lieber.

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