Home Report: Virginia earns ‘A’ grade from small businesses for second year in a row

Report: Virginia earns ‘A’ grade from small businesses for second year in a row


economic-forecast-headerThumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, has released the second-annual Thumbtack.com Small Business Friendliness Survey showing that Virginia continues to be a top state for small businesses, earning an ‘A’ grade for the ease of starting a business in the state and an ‘A’ overall.

The Thumbtack.com Small Business Friendliness Survey is the only survey to obtain data from an extensive, nationwide universe of job creators and entrepreneurs in order to determine the most business-friendly locations. While there are various “business climate rankings” that rate locations as good or bad for business, there are no others that draw upon considerable data from small business owners themselves.

“For the second year, Virginia set an outstanding example of providing a supportive environment for small business,” said Sander Daniels, co-founder of Thumbtack.com. “Our research with thousands of small businesses points to the importance of clear and consistent regulations and relevant training programs, and these are exactly the areas where Virginia excels.”

Some of the key findings for Virginia include:

  • · Small business owners ranked Virginia #6 for its overall business friendliness, up from #7 last year. In comparison to Virginia’s ‘A’ grade, Maryland was middle-tier with a ‘C’.
  • · The state also received an ‘A’ grade for its licensing regulations and tax codes, as well as an ‘A’ for its training and networking programs. Additionally, Virginia was ranked #4 for the quality of its online business resources.
  • · Nationally, professional licensing requirements were more important to small business owners than taxes in determining a state’s overall business-friendliness, confirming the findings from last year’s study.
  • · African-American and Hispanic small business owners were more likely than their white counterparts to encourage others to start a new business.
  • · The top ranking states overall were UtahAlabamaNew HampshireIdaho, and Texas.  The lowest rated were IllinoisCaliforniaHawaiiMaine and, in last place, Rhode Island.
  • · Among major cities nationwide, the Norfolk-Virginia Beach metro earned an A+ as the #2 city for small business. Richmond also fared well with a B+ overall grade. Washington DC and Baltimore received a ‘B’ and a ‘C’ grade, respectively.
  • · Virginia’s lowest mark was an A- for its zoning regulations.

“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, director of Research and Policy at the Kauffman Foundation.  “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.”

The full survey results can be seen here and include full sets of rankings, easily searchable quotes from Virginia small businesses, regional comparisons within states, and Census data comparing Virginia’s key demographics against those of other states.

“The Virginia Department of Environmental Quality has been quite helpful, as have the various municipal departments I deal with. Many complain about the personal property taxes here, but it seems to keep other fees down, and I think that helps business overall. It’s been a very positive experience running a business in the region.”

Survey methodology

Thumbtack.com surveyed 7,766 small businesses across the United States. The survey asked questions about the friendliness of states and cities toward small business, such as:

  • · “In general, how would you rate your state’s support of small business owners?”
  • · “Would you discourage or encourage someone from starting a new business where you live?” and
  • · “Do you think you pay your fair share of taxes?”

Thumbtack and Kauffman ranked states and cities against one another along more than a dozen metrics.  The full methodology paper can be found here.

What is Thumbtack.com?

Thumbtack is a place where you can hire help locally. Need house cleaning professionalsplumberscarpentersor real estate brokers?  Tell us what you need, and we’ll provide 3-5 bids on that job to your email inbox within 24 hours. More than 275,000 small businesses and freelancers have listed their services on Thumbtack nationwide.



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