Every entrepreneur knows it's hard to start a new small business — but the scale of exactly how hard it can be depends on where you're headquartered, among other factors.
Thumbtack released the grades from its annual 2017 Small Business Friendliness Survey, and found Oregon ranked 37 out of 50, receiving evaluations 3 percent worse than last year.
The survey is the largest continuous study of small business perceptions of government policy in the U.S., and it included more than 13,000 small business owners across 80 cities.
Thumbtack is an app and website that connects local professionals with clients and projects. Founded in 2009, Thumbtack is based in San Francisco and generated more than $1 billion in earnings for its professionals in 2016. Across 1,000 fields, there are 250,000 professional Thumbtack users.
The survey evaluated how easy state and local governments make it to start, operate and grow a small business.
Thumbtack assigned 12 policy-specific grades: overall friendliness, ease of starting a business, ease of hiring, regulations, health and safety, employment and hiring, tax code, licensing, environmental factors, zoning, training and networking programs, and government websites.
"The small business owners we heard from in Oregon were 2 percent less positive about their state's support for small businesses than the national average, leading to their C grade overall," said Thumbtack economist Lucas Puente. "And compared to nearby states, such as Washington (B+) and California (C-), Oregon did similarly."
Puente surveyed 13,284 skilled professionals across the U.S. from electricians to musicians to teachers to wedding planners to interior designers, asking the entrepreneurs about the overall level of support in their community and how the policies of their states and cities affected their ability to do business.
"In Oregon, small businesses are simply set up and the state provides lots of good resources and websites that make licensing easy," said an anonymous architect from Beaverton in the survey.
But, the ease of setting up as an entrepreneur varies by industry.
"I have found that county-to-county, rules and regulations are difficult, especially in regard to taxation and border state issues," said an anonymous personal chef from Happy Valley in the survey. "As a culinarian in a freelance business and struggling entrepreneur, I am expected to pay a different fee, licensing and tax privilege to each and every single township or municipality that I do business in."
It also varies by location and experience.
"We are fairly new to Oregon, but it is easier and cheaper to start a business here than it was in California," said an anonymous planner in Portland in the survey. "We have yet to run into any issues with how we run our business from a regulatory standpoint."
The best A+ states for small businesses include Idaho, Texas, Utah, Wyoming, Louisiana, Indiana and Maine. As for the lowest, three states received Fs — New Mexico, Alaska and Illinois — New York earned a D+ and West Virginia a D.
Laura Sabo, owner of Portland-based 13 Design Lane Interiors, said she doesn't face small business hurdles in Portland except competition. She founded her company in 2013 (part of the name).
She's the designer of the restaurant SouthFork in Northeast Portland, but doesn't confine herself to the city — she headed out to the coast to Manzanita last week to meet a prospect. She works in areas such as West Linn, Lake Oswego, the Pearl and Oregon City.
She likes using Thumbtack for business because it sets time limits and places limits on offers — so for those who respond within a period of time, the system allows five responses. In this way, Sabo scored a 2006 Street of Dreams client.
"It was already gorgeous, but we did a lot of improvements ... the homeowner had an extended, screened-in porch off their living room," Sabo said. "The previous owner used it for themselves. She's using it for a catio — a space dedicated to cats. It's really, really cute, there are cat trees in there, cat paraphernalia, a lot of bird things, a big area rug full of birds — it's so, so cute."
Besides the catio, she also updated that owner's theater room, bonus room with a pool table and walk-in closets.
"Business is good, I have to say it's very competitive," Sabo said. "A lot of times I'll get contacted by somebody, do some leg work, and then they won't follow through. In a way, it's disappointing but I found ways to get around that by introducing a retainer agreement saying this binds both of us to the project and it seems to work a little better, but it's still very competitive even getting contacted for the first time."
The survey showed Oregon's small businesses rated the state a D+ for ease of starting a business, ease of hiring, tax code and zoning. They graded a D for employment, labor and hiring; a C- for regulations and environmental factors; a C for training and networking programs and overall friendliness; and they graded a C+ for health and safety and licensing.
"As far as starting a business ... I think it's very easy," Sabo said. "When I went to interior design school they said you cannot get clients while you're in school, but the day I graduated I started marketing myself and right off the shoot I had clients."
She said local businesses in other industries are friendly to each other, though.
"You are at most places allowed a trade discount," Sabo said. "A lot of the local businesses that are a one-shop thing, to purchase furniture or places like that in the Pearl District, they offer a discount and they really don't have to."
While clientele are still coming in strong for Sabo — as long as she works hard for it — growth has been a struggle to ramp up.
"Ideally, I would love to be able to hire somebody because it seems like 25 percent of what I do is interior design, and the 75 percent rest of it is marketing, following up on emails, posting things on Facebook or Houzz, or the bookkeeping part," Sabo said. "I would eventually love to hire somebody, but I'm not at that point."
Oregon's highest score, a B+, was for government websites.
Sabo said of legal setup on the local government websites: "Oh, it was very easy."
"I sat down one day and just started applying and making my own website and doing those types of things — the website didn't take just a day, but applying for the licenses did," Sabo said.
Still, the overall C is Oregon's lowest score since the survey began: in 2012, Oregon scored a B; in 2013, a C+; in 2014, a C+; in 2015, a B; and in 2016 a B+.
In 2016, the highest-scoring areas that received an A+ were ease of starting a business and training and networking programs.
"Hiring, I don't see that as a problem because I'm forever getting emails from people asking if I'm in a position to hire them — normally, it's for 3D design or SEO content — I just don't see that it would be that hard, being that there's so many of us out there," Sabo said.
She finds creative ways to get jobs, by donating an hour of consultation to school auctions, or give it as a gift card to a real estate agent friend who hands them out to closers. Some work comes online through social media, Thumbtack or Houzz.
"I have hired temporarily an accountant to help me, it's a mother-daughter business (Portland Bookkeepers)," Sabo said. "The daughter helps me with QuickBooks and stuff like that, and the mother is the tax expert."
She's working on nine projects right now, and each one takes an average of six months, but varies.
"The biggest thing is the competition. That really is the hardest thing, being out there with the competition," Sabo said. "Once you get a client, you pretty much have them, other than those who pick your brain for advice and then DIY."
Read the survey here: www.thumbtack.com/survey
Find an interior designer near you here: www.thumbtack.com/k/interior-designers/near-me/
By Jules Rogers
Reporter, The Business Tribune
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13 Design Lane
Owner: Laura Sabo
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