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Rochester’s small-business climate gets good ratings

The plurality of respondents to this week’s RBJ Daily Report Snap Poll gives Rochester’s climate for small businesses a good rating.

The latest annual rating by American City Business Journals’ On Numbers ranks Rochester as the fourth-strongest market for small businesses in the Eastern United States and the 21st nationwide.

Most Snap Poll respondents agree. Thirteen percent say Rochester’s climate for small businesses is excellent, and 48 percent say it is good.

Among the 58 percent who said they personally own or work for a business with fewer than 100 employees, the response was slightly less favorable. Forty-five percent rate Rochester’s climate for small businesses as good and 12 percent say excellent. In this group, 14 percent say it’s poor, compared with 9 percent of all respondents.

On Numbers uses a six-part formula to rate the small-business climates in 21 major Eastern metropolitan areas and 100 throughout the United States. The factors weighed are: five-year population growth, five- and one-year private-sector employment growth, concentration of small businesses per 1,000 residents, one-year change in that concentration, and one-year growth in the number of small businesses.

Rochester ranked 73rd in small businesses per 1,000 residents, at 22.08. It had 22,849 small businesses in 2009—the latest year for which U.S. Census Bureau figures are available—versus 23,063 in 2008. Of the 100 metro areas nationwide, 97 had a decline in small firms that year.

According to On Numbers, the best market for small business nationwide is Austin, Texas; Pittsburgh rates No. 1 in the Eastern region. (The On Numbers report can be accessed at <a href="go.rbj.net/numbers"> go.rbj.net/numbers</a>)

Roughly 415 readers participated in this week’s poll, which was conducted April 9 and 10.

In your view, how does Rochester’s climate for small businesses rate?

Excellent: 13%
Good: 48%
Fair: 30%
Poor: 9%

Do you personally own or work for a business with fewer than 100 employees?

Yes: 58%
No: 42%

COMMENTS:

Yes! It is because Rochester has entrepreneurs with brains and heart and guts and investors with the capital and foresight to see it and back it.
—Jay Birnbaum

With the research and development, technical and professional personnel we have in the Rochester area, there’s no excuse why we should not be in the top five in the country. Oh yeah, that’s right, we’re in New York State (the land of taxes, fees, ridiculous mandates and negative business climate), which handicaps us from ever remotely achieving that goal. Make this region an experimental model, completely void of New York State restrictions, and see how it flourishes. See how many companies flock to this region. We would be the model for the rest of the state and most likely the nation.
—Jim Duke, Victor

New York State continues to be a difficult state in which to do business. In a climate where customers continue to press for cost-downs, New York State raised the workers’ compensation assessment from 18 percent to 20 percent of scheduled premium. In addition, base comp rates increased an average of 14 percent year over year. Add to that the spiraling, out-of-control health insurance premium costs, and you begin to understand the serious challenges faced by small business.
—Paul Ozminkowski, VI Manufacturing Inc.

This is ridiculous. If Rochester ranks in the (top) 25 cities in the U.S. and fourth in the East, then it’s time to leave the country. To say the political environment in New York is toxic to all business—but especially small business—would be a vast understatement. If our number for small business looks good, it’s simply because we have driven so many large businesses out of the area that the former employees have no choice left but to try to employ themselves somehow.
—Devon Michaels, Chili

Taxes and fees are the killer for small businesses anywhere in this state!
—Rick Corey, OpticsProfessionals LLC

New York State throws as many obstacles as possible into the path of a small business trying to grow. Try dealing with the DEC, whose mission seems to be to shut down any business daring to operate here. Try buying low-cost power when New York’s taxes and regulatory hurdles put our cost of electricity among the highest in the country. Try being audited by the state Tax Department, which assumes if you are in private business you must be a crook. Try hiring someone and dealing with the Department of Labor, which assumes you are trying to cheat your employees. The list goes on. New York has far too many bureaucrats meddling in the affairs of private business, which has pushed growth capital to other states. The politicians such as (Lt. Gov. Robert) Duffy like to hold “economic development” hearings; then they do nothing to reverse the anti-business climate.
—Bob Sarbane

One local gem is the Rochester Professional Consultants Network, an organization of more than 150 independent consultants. The organization is creating jobs by helping consultants get started and succeed. Another major community asset is High Tech Rochester. This region is producing more jobs than anywhere in upstate. That’s also a strong indicator of how well we’re doing.
—Brian Kane, Three Lakes Consulting

There are so many obstacles here for businesses in Rochester and New York in general, including Internet rates that are almost double for commercial what they are for residential, higher commercial vehicle registration and insurance costs, and higher sales tax, to name just a few. At the same time, the customer base has less disposable income than ever before and certainly less than in larger cities. The reality is that if we’re 21st, what must the other cities be like?
—Joanne Greene-Blose, the Project Solvers of America Inc.

It’s “poor” because New York State is poor. Rochester does better than most because of the people here. The detriment to the success of any business is New York State and the crushing taxes, regulation and intrusion into the business of every company every day. New York State is not open for business.
—Karl Schuler

The small-business climate would be improved if more people could take part in our economy. A good first step would be to try to make the bus system work to connect our suburbs. As an example, there are no midday routes south of Lehigh Station Road, leaving south Henrietta, Rush, Mendon, Honeoye Falls and Avon with no way to get home after a morning appointment or part-time job.
— Richard Spencer

As a small manufacturing business for years, our locally based shipments comprised of 50 percent to 60 percent of our business. Today, with the loss and downsizing of many of the larger manufacturers in the area, that number hovers closer to 15 percent to 20 percent. The issue though is not Rochester the issue is New York State and its onerous and costly rules and regulations that increase the cost of doing business in the state (e.g.; workers compensation, income taxes, sales taxes and real estate taxes). I think the Rochester area with its strong educational base, an affluent consumer base and business oriented local officials tend to mitigate the pains caused at the state level but we can and must do better if we are to retain and grow businesses, especially manufacturing business in our area.
—Peter Short, J.J. Short Associates, Inc

The greater Rochester area is blessed with great biotech, optical, sustainability, cutting edge software gurus, bio-medics, nanotechnology–all with promising innovations and business potential. Our area lacks the ability to seriously attract capital formation to evolve. That is our dilemma. The greater western New York area needs a billion dollar fund located here to attract venture capital, private equity and high wealth individuals outside of our area as an attractant to invest in the brains our Universities produce each and every year. We continue to export our cutting edge innovators, entrepreneurs or ideas to other parts of the country.
—Dave Rosin 

Now that the shock of Kodak has finally wound down over the past 25 years, Rochester is positioned for growth again. Businesses are starting to spend money now, and the business climate is going to change drastically from cheap or free marketing, to how can businesses invest in a competitive edge for growth. That’s where small business can help and benefit.
—Bob Farrell, ThefarrellEdge.com

There are more "great brains" being let go from Kodak each week, that can start a small business. Kodak’s lack of foresight is spawning the entrepreneurial explosion that is making Rochester a center of small business development in a very diversified way!
—Hal Gaffin

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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