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How we rate

Studies claiming to identify the best places in the country to do business are a dime a dozen. Most analyze government and other publicly available data.

The rankings generated tend to reveal more about the sponsoring organizations—and their individual agendas—than the communities scrutinized.

Thumbtack.com, a San Francisco-based consumer services website, has taken a different approach. With the Ewing Marion Kauffman Foundation, Thumbtack.com asked 13,000 small-business owners, to rate their own states and cities on business-friendliness.

Some of the results will come as no surprise. Among 39 states ranked, New York ranked 32nd with a D+ overall grade. (At the top of the list, with A+ grades, were Utah, Idaho, Texas and Virginia; the bottom three, with F grades, were California, Illinois and Rhode Island.)

But notice this: Among 82 cities ranked, Rochester placed 30th with an overall grade of B. While it did not earn top 10 bragging rights, Rochester scored higher than the other New York metro areas on the list: New York City (49th, C+), Albany (55th, C) and Buffalo (80th, F). Also trailing it on the list were cities like Boston, San Francisco, Los Angeles and Chicago.

Rochester fared poorly in ease of hiring, ranking 75th, and overall regulations, at 73rd. But as a place to start a business, it placed fifth. Training and networking were strengths, survey respondents said.

Among a number of other interesting findings, the Thumbtack researchers found that in assessing good environments for small business, ease of tax compliance was a more important factor than the amount of tax paid. Ease of complying with licensing and permitting regulations also had a strong correlation to company owners’ views on business-friendliness.

The Thumbtack survey comes with a few caveats. For example, because the website is used chiefly by independent professionals to find leads for their businesses, certain sectors—manufacturing among them—are underrepresented.

But at a minimum, the survey offers a different perspective on the factors that determine small-business friendliness, and its findings could help local officials make more informed decisions about policies to foster business growth.

6/13/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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