Thumbtack gives Washington a C grade for “small business friendliness” – low marks for regulation

Another business climate ranking came out recently. This one comes from, with support from the Kauffman Foundation.  Washington doesn’t do so well. Unsurprisingly, the regulatory environment pulled the overall score down considerably.

Some of the key findings for Washington include:

  • Washington earned one of the worst grades in the country for its regulations – a D+ – but earned an A- for the ease of starting a business.
  • Small businesses were particularly hard on Washington’s labor and environmental laws, giving both a grade of D, and its zoning regulations earned a grade of F.
  • Female entrepreneurs in Washington were significantly more likely to give their state government positive reviews than male entrepreneurs, rating the friendliness of state government 15 percent higher than their male counterparts.
  • Washington’s networking and training programs for small businesses scored very well, rating 6th in the nation overall.
  • Washington’s regulations were some of the worst in the land – the highest grade received in any category was for licensing, which earned a grade of C.
  • The top rated states overall were Utah, Idaho, Texas, Virginia and Louisiana. The lowest rated were Rhode Island, Illinois, California, Connecticut and New Jersey.

We wrote about the Thumbtack rankings in this 2012 publication. Here’s what Thumbtack considers the most important difference between their rankings and most others.

The data underlying our rankings are survey responses from local business owner-operators themselves about their region’s business friendliness. The data underlying many – even most – other rankings is instead typically a collection of government or private data (such as unemployment rates, income per capita and tax rates) that the organizations composing the rankings hypothesize might be a proxy for the friendliness of a particular business climate. Not only must those organizations guess the metrics that are important to businesses, but they must also guess the relative importance to businesses of those metrics in weighting those metrics to produce the rankings. Instead, our survey asks the perception of the business climate without defining what a good climate is and can directly reflect the voices of small business owners.

Take it for what it’s worth. Perceptions matter, of course, but I do like to see some metrics.



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