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MSP earns high grades for small-business friendliness

On July 1, in partnership with the Ewing Marion Kauffman Foundation, online business directory Thumbtack released its annual small business survey of U.S. cities. Minneapolis-St. Paul finished in eleventh place and earned an overall "A" rating, falling behind several cities in Texas and smaller Mountain West towns like Colorado Springs and Boise.

The Thumbtack-Kauffman survey subjected the Twin Cities to more than a dozen measurements, based on responses from surveyed small business owners.The region earned an "A" grade for ease of starting a business and an "A+" for the availability of training and networking programs. It earned decent"'B+" grades for environmental and zoning regulations, and a "B" for health and safety. Licensing rules and employment, labor and hiring protocols came in at the '"B-" mark, with the local tax code and ease of hiring scoring "C+"

The Cities' rankings showed marked improvement over the past two years. Minneapolis-St. Paul's overall rating was "B+" in 2013 and "'B" in 2012. The change in availability of training and networking programs was particularly noteworthy, with a jump from "C-" to "A+" between last year and this year. The overall regulatory environment and ease of hiring improved significantly as well.

Although the Twin Cities could have scored higher in some areas, the region fared great next to some well-known locales. Buffalo, Providence, Sacramento, and San Diego earned "F" grades for overall business friendliness, and many other East and West Coast cities failed to clear the "D" bar. At the state level, California, Illinois and Rhode Island earned failing grades.

The survey also sourced subjective opinions from business owners across the Cities. Some of these were glowing: A Minneapolis-based designer reported that "I'm in a great location and have a lot of room for growth." Others were more skeptical of local governments' role in business, with a Minneapolis pet sitter complaining about the state sales tax on dog-walking services. 

Relatively high taxes, coupled with byzantine regulations, were a common complaint. But some respondents actually argued for a more hands-on approach by local regulators, including a Minneapolis voice teacher who complained that hands-off licensing was creating room for scam artists in the field.

Thumbtack's survey collected reponses from about 12,000 U.S. small business owners (in the Lower 48 only) over a two-month period in early 2014. For a copy of the full report, contact jon.lieber@thumbtack.com.

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