Louisiana earns high marks for business-friendly labor laws and tax code

Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, has released the second-annual Thumbtack.com Small Business Friendliness Survey showing that small businesses rated Louisiana among the most business friendly states, particularly in terms of its training programs and labor regulations.

This is the only survey to obtain data from an extensive, nationwide universe of job creators and entrepreneurs in order to determine the most business-friendly locations. While there are various “business climate rankings” that rate locations as good or bad for business, there are no others that draw upon considerable data from small business owners themselves.

“In surveying thousands of small businesses across America, we found that clear and consistent regulations and relevant training programs are among the most important factors in determining how they view their region’s friendliness,” said Sander Daniels, co-founder of Thumbtack.com. “By continuing to focus on these areas and listen to the concerns of the state’s small business owners, Louisiana state and local officials can put themselves in a position to provide this critical group of job creators with an environment conducive to growth and success.”

Some of the key findings for Louisiana include:

  • Louisiana earned an ‘A’ grade for its small business training and networking programs.
  • Small businesses rated the state’s labor and employment laws an ‘A-‘. Louisiana’s tax code earned a ‘B+ grade’.
  • Nationally, professional licensing requirements were more important to small business owners than taxes in determining a state’s overall business-friendliness, confirming the findings from last year’s study.
  • African-American and Hispanic small business owners were more likely than their white counterparts to encourage others to start a new business.
  • The top ranking states overall were Utah, Alabama, New Hampshire, Idaho, and Texas.  The lowest rated were Illinois, California, Hawaii, Maine and, in last place, Rhode Island.
  • Louisiana’s online resources for small businesses were rated among the nation’s ten best.
  • One area of concern for small businesses in Louisiana was obtaining and keeping health insurance, with 47% describing it as “Very Difficult.”

“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, director of Research and Policy at the Kauffman Foundation.  “Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves.”

The full survey results can be seen here and include full sets of rankings, easily searchable quotes from Louisiana small businesses, regional comparisons within states, and Census data comparing Louisiana’s key demographics against those of other states.

Survey methodology

Thumbtack.com surveyed 7,766 small businesses across the United States. The survey asked questions about the friendliness of states and cities toward small business, such as:

  • “In general, how would you rate your state’s support of small business owners?”
  • “Would you discourage or encourage someone from starting a new business where you live?” and
  • “Do you think you pay your fair share of taxes?”

Thumbtack and Kauffman ranked states and cities against one another along more than a dozen metrics.  The full methodology paper can be found here.