Survey declares Austin #1 for small businesses

Barak Bullock

Austin was declared the friendliest city to small businesses in America by entrepreneurs who answered’s 2013 Small Business Friendliness Survey.

The 2013 survey, released earlier this week, was a collaboration between researchers at Thumbtack and the Ewing Marion Kauffman Foundation, an organization for education and entrepreneurship. Austin moved up from its fourth-place ranking in 2012, which was the first year the study was conducted. 

According to the research methodology published with the report, the survey asked 7,766 small business owners on Thumbtack, a website that connects customers to local businesses, to rate their resident cities and states in a number of different categories. These categories related to owners’ opinions on local or state governments’ attitudes, ranging from regulations on health, employment and taxes, to difficulty in acquiring permits, training and networking. 

Nathan Allen, the lead researcher on the Thumbtack survey, explained that the survey differs from many previous studies because of its focus on the perceptions of small business owners, rather than measures like unemployment rates or income tax rates.

Allen also said the survey revealed that friendliness of licensing, permitting, training and networking for small businesses were some of the best indications of top scoring locations.

“We found in both years that how a business owner viewed the friendliness or unfriendliness of the professional licensing and permitting regulations and rules was one of the best predictors of how they rated the overall friendliness of the city or state,” Allen said. “Additionally, helpful training and networking programs for small businesses, especially the relatively simple programs targeted at helping to get the business up and running, were another strong predictor of overall business friendliness.”

Thumbtack awarded Austin an ‘A’ on every category other than a ‘B+’ on zoning. Virginia Beach beat Austin for the easiest city in which to start a business.

“Austin really does well in all regards — the city earned an ‘A+’ for its training and networking programs and a pair of ‘A’ grades for its licensing regulations and its regulatory systems overall,” Allen said.

Ramiro Palma, an accenture venture partner at Texas Venture Labs, says the news doesn’t particularly come as a shock.

“That’s not really surprising to me at all actually … there’s been a lot of similar surveys that have come out that basically say Texas is a good place to do business,” Palma said.

Local business owner Ken Jones, who heads Austin TXbooks and Melissa’s Custom Gifts, said he believes the capital city’s success is due to an educated workforce and a spirit of creativity. 

“I think growth has a lot to do with it,” Jones said. “I also think we have a highly educated workforce with, you know, three universities in town, four maybe, and several close by. So you’ve got a smart, educated workforce and I think just a general can-do attitude, which makes an environment ripe for entrepreneurship.”