Which US States are Small Business Friendly?

Small businesses in the United States are engines of the American economy, employing nearly 20 percent of Americans. So, what makes one state more small-business friendly than another? The results are in from the Thumbtack Small Business Survey—the largest continuous study of small business perceptions of government policy in the US—and may even surprise you if you associate big cities and large population centers with small business opportunity.

#1 South Dakota. Spanning geography and climate, the most friendly states were South Dakota, Tennessee, Alaska, Michigan, and Utah, all earning an overall A+. South Dakota shot to the top of the rankings in 2018 with a top score in all categories except ease of hiring (graded a D) and starting a business (B-), no doubt impeded by its relatively small, rural population base. 

#42 New York. A surprise for some, New York ranked 42nd in this year's survey, with hiring (graded C+), tax code (F), and government websites (F) lowering its friendliness profile.

#50 Illinois. One state had to be last, but in the case of Illinois, which scored six Fs, two Ds, and one B (ease of hiring), clearly some states have much further to go than others to improve the business climate from the perspective of the small business owners.

The 2018 survey results are based on the responses of 7,500 small business owners in 50 states and 57 cities who answered questions about the policies of their states and cities toward small business, as well as the overall level of support in their community. The survey included: the ease of starting a business, ease of hiring, regulatory burdens, and available training and networking opportunities for business owners. Visit Thumbtack for more details on the survey.


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