Is Your City Small Business-Friendly?

General | April 10, 2013 | 3 min read

If you’ve ever looked for a new office, apartment or house — even a hotel room — you have discovered there is truth in the universal real-estate maxim. Location, location, location…

Location is everything. Now I’m not trying to sound like a cheesy, real-estate agent, but this mantra also holds true when starting and growing a small business. Along with a great product or service and enough start-up capital, the success of your small business can be greatly influenced by your location.

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Austin, Texas has become one of the most popular destinations in the United States over the last few years. We here at the Zoho Austin office can attest to that. And maybe part of its popularity is due to the city’s small business-friendly environment.

As the nation’s second-fastest growing city in 2012 and fastest growing city in 2011, Austin was also named the friendliest city in the country for small businesses, in the second annual Small Business Survey by San Francisco-based Thumbstack.com and Kansas-City-based Kauffman Foundation.

The survey, compromised of nearly 8,000 business owners across the nation gave Austin an “A+” rating. The overall ranking was based on factors like ease of starting a business, training and networking programs, ease of hiring and regulations, health and safety, labor and hiring, licensing and environmental, tax code and zoning.

And while it’s no secret to us here in the Zoho Austin office how great the city is, the “friendliest small business city” ranking got us thinking: What makes a city accepting and nurturing for small businesses?

The Survey Says…

According to the above survey, the most important predictor of a city or state’s overall score was training and networking programs. The survey also found that a state’s economy and number of licensing requirements were also very influential.

In fact, the data showed that the number of licensing requirements was 30 percent more important for small business owners than tax codes — an area many people assume plays a pivotal role in the  location of a small business.

“For most small businesses, simple licensing regulations and helpful training programs are even more important to their success [than low taxes],” Thumbstack co-founder Sander Daniels told The Business Journals.

Barriers to Entry

Although it may seem obvious, the friendliest cities for small businesses typically have the fewest number of road blocks for the owners to enter the market. There are a number of licensing requirements from state-level agencies and many entrepreneurs are unaware of what they need to start a business besides a great idea or product.

Co-author of the report Nathan Allen said that the licensing requirements were very influential because “it’s something [small business owners] really have to contend with and stay up on…the time they have to spend on it can become a serious burden to their growth.”

Cities with business resource centers or development programs can link small business owners to a number of resources and training programs in their communities to help streamline city and permit approval.

For example, the city of Chicago recently set up a restaurant start-up program to give prospective restaurateurs information on choosing the best location, inspections and licensing. The city of Austin has a Small Business Development Center with information on applying for a loan to how you can improve your marketing strategy.

Do Your Research

Choosing any city to start your small business isn’t always possible or practical. In fact, statistics suggest that the majority of people open businesses where they are currently living.

Start by studying places like Austin to see why they are so friendly to small businesses and focus on getting engaged in your community to learn about existing avenues for training and networking. Ultimately, you can work to build your area into a valuable resource for you and your fellow small business owners — wherever you live.

Tags : Austin