Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, has released the second-annual Thumbtack.com Small Business Friendliness Survey showing that small business owners awarded Houston an ‘A+’ for overall small business friendliness. Houston was also ranked among the easiest cities for starting a new business. 

The Thumbtack.com Small Business Friendliness Survey 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.

“Having spoken with many Houston small business owners, it was no surprise that the city earned an ‘A+’ in this year’s study,” said Sander Daniels, co-founder of Thumbtack.com. “Houston’s sensible approach to regulations and its helpful small business resources make the city a partner in success instead of an obstacle.”

Some of the key findings for Houston – and Texas generally – include:

In addition to its overall ‘A+’, Houston earned an ‘A’ for its employment and labor rules. The city also received a pair of ‘A+’ grades for its business-friendly health and safety regulations and zoning requirements.

Houston earned a ‘B+’ for its training and networking programs for small businesses.

In addition to earning an ‘A’ from small businesses, Texas was home to four of the top ten US cities: Austin (#1), Houston (#3), San Antonio (#5) and Dallas-Ft. Worth (#7). The state also ranked 7th in the nation for the quality of its online business resources.

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 cities overall were Austin, Virginia Beach, Houston, Colorado Springs and San Antonio.  The lowest rated were Los Angeles, San Diego, Cincinnati, Sacramento and, in last place, Newark, NJ.

Although Houston ranked highly in most categories and improved its overall ranking, the city received a ‘B’ for its licensing and permitting requirements, its lowest grade.

“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.”