Thursday, April 11, 2013

Five Outstanding Business Friendly Communities

By Jonathan Miller, Project Associate. 

According to a 2012 story by NPR, between 2010 and 2012, the phrase “small business” appeared over 10,000 times in the Congressional Record (the daily recording of what is said in Congress), more than “debt limit,” but less than “taxes.” In the same story, a GOP pollster recalls that “small business owner” tested more favorably with audiences than other monikers because, “Being a small-business owner is the American dream. It's the epitome of success. People respect that individual." Understanding the issues and challenges faced by small business is compelling, as those challenges often have relatively simple (if politically difficult) solutions. (a site that promotes and matches users to local service professionals) and the Kauffman Foundation recently released the results of their 2013 Small Business Friendliness Survey. The survey asked small businesses that use a battery of questions about the most common obstacles they face in their business. Showing continuity with last year’s results, small business owners rated licensing requirements as the most important factor when it comes to business friendliness – 30 percent more important than taxes. 

Market Street has worked in over 150 communities in 32 states, so it’s always a pleasure to bring extra attention to those places that are excelling. The following cities (and Market Street clients) were ranked highly in the Small Business Friendliness Survey. 


Overall Grade: A-
Best Category: Ease of hiring
2012 Grade: A

Atlanta may not be Austin or Silicon Valley in terms of entrepreneurship, but the stock and quality of small business owners is on the rise. In a report by the Kauffman Foundation in 2012, Atlanta had the second-highest entrepreneurial activity rate at 580 per 100,000 adults. Only Los Angeles posted a better score. Atlanta’s international population, world-class airport, and robust higher education assets create an enviable business climate that is conducive to innovation. Low levels of venture capital and traffic problems (real and perceived) continue to be serious concerns. Survey respondents dinged Atlanta with regard to ‘training and networking programs.’ Specific objectives in the recently completed Metro Atlanta Regional Economic Development Strategy call for regional investment in educating workers, establishing robust career and college pipelines, and proactively supporting entrepreneurial activity. Initiatives such as Atlanta Tech Village and Hypepotamus are already connecting entrepreneurs while providing common office space. 

Austin, Texas 

Overall Ranking: A+
Best Category: Overall
2012 Grade: A+

Austin is one of the most dynamic cities in terms of economic growth. Job creation has been abundant in the wake of the Great Recession, leading most, if not all, cities in overall job creation. Unsurprisingly, among the cities surveyed, Austin has a higher percentage of respondents who had previous entrepreneur experience. Further, the recent announcement that Google Fiber will be available in Austin increases the ability of entrepreneurs to access high speed internet in their homes. Survey respondents ranked Austin’s ‘zoning’ as the least business friendly aspect of the city. Finding the right middle ground in regard to zoning and regulations has been an issue in Austin, and both the city and chamber are working to find acceptable solutions. The most recent Opportunity Austin 3.0 doubles down on ensuring that zoning and permitting regulations are streamlined and as competitive as possible and the city recently selected a consulting group to lead the overhaul of the city’s Land Development Code. 

Nashville, Tennessee 

Overall Ranking: A
Best Category: Employment, labor & hiring (regulations)
2012 Grade: B

Nashville is an ascending economic powerhouse that is supplementing its country music roots with robust employment in health care, technology, and manufacturing. In fact, 75 percent of the entrepreneurs surveyed said they would encourage others to start a business in Nashville. Survey respondents also felt that ‘zoning’ in Nashville was a competitive obstacle. To address this, as well as other concerns, the Nashville-Davidson Planning Department, in partnership with many key organizations, including the Nashville Area Chamber of Commerce, is leading a two-year planning process to define a long-term vision for the city and county, which will include land use processes and zoning. The process, Nashville Next, is soliciting public input through many channels and is seeking to rally Nashville residents for the future of the city. 

Kansas City, Missouri 

Overall Ranking: A-
Best Category: Zoning
2012 Grade: Not included in survey

Kansas City is home to the Kauffman Foundation, one of the great supportive forces of entrepreneurship in the nation. Speaking of Google Fiber, Kansas City was the first city to receive the infrastructure upgrade and in February 2013, Brad Feld, a venture capitalist from Boulder, announced he was buying a house in Kansas City and holding a competition for innovative startups to compete for rent-free living and access to the fiber (see Evan Robertson’s recent blog post for more information). Kansas City also caters to its small business community via KCSourceLink, an agglomeration of business support services that cater to different types and stages of entrepreneurs. Survey respondents rated ‘‘training and networking programs’ as the least competitive aspect of small business friendliness. However, a quick look at the KCSourceLink Classes and Events calendar shows a plethora of opportunities for small businesses to engage in programming related to importing and exporting, technology, startups, marketing, and funding/accounting, among others. 

Richmond, Virginia 

Overall Ranking: B+
Best Category: Licensing
2012 Grade: Not included in survey

Richmond may seem like a surprising city to be ranked in similar categories as Austin and Nashville, but it has a very strong small business community. In fact, the city’s first business accelerator, Lighthouse Labs, opened in this year, and the city play will host to the inaugural Governor’s Business Plan Challenge, an undergraduate business plan competition, later this year. While the survey found that “ease of hiring” was rated as a challenge by respondents, which is not a trend found in other survey instruments. The Greater Richmond Partnership operates a robust BRE program, Business First, which touches many existing businesses and helps them to overcome obstacles to expansion. Results from surveys conducted as part of the program found that hiring and recruiting was not a problem experienced by existing employers, in fact, 73 percent of respondents rated workforce quality as good or excellent, and fewer than 20 percent indicated problems recruiting. Overall, Richmond ranked as the ninth-easiest city in which to do business.