Survey Shows Mass. Unfriendly to Small Businesses

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Saturday, May 26, 2012

Ashley Klann, GoLocalWorcester Contributor

Taxachusetts has a reputation for being a costly state, and those notoriously high bills, health care costs, and regulations have earned Mass. a "D" for small business friendliness.

Thumbtack.com, an online marketplace to find local services compiled the national ranking of small business friendliness based on several variables that affect business growth and longevity, including: Hiring Costs, Regulations, Health & Safety, Employment, Labor & Hiring, Tax Code, Licensing, Environmental, Zoning, Training programs, Networking programs, and Optimism about the future.

The Thumbtack.com Small Business Survey is in partnership with Kauffman Foundation and also divides each state into regions.

Massachusetts received a “D” for all categories except three. Hiring and Training costs received a “C,” and Networking programs received an “A.” These grades reflect the low cost to hire a new employee, and the ease of access to state or local government-run networking and training for businesses.

While the state received low marks across the board, it still placed 11th in annual growth rate, nationally, judging on an individual company basis.

Bad Marks

Massachusetts scored lowest on various categories that mean extra expenditures for businesses, such as regulations, taxes, and zoning laws. These bureaucratic hindrances hold back businesses and keep them from being efficient.

“If you take a look at some of the criteria, on a statewide basis there is a lot of regulation and lengthy processes,” said Dick Kennedy, President and CEO of the Worcester Regional Chamber of Commerce. “In general that’s a burden to people, and it’s certainly not business friendly.”

These issues, he said, are more harmful to smaller businesses who may not be expecting so many hoops to jump through.

“Probably the smaller business that aren’t used to going through the regulations find it more of a surprise than maybe larger organizations that are continuing to have to deal with it,” he said. “If we talk to our small business owners and businesses in general about the issues of taxation and health care costs, unemployment costs, cost of energy, regulation per se is probably down that list.”

In Worcester

According to Kennedy and the state map at Thumbtack.com, Worcester County is in better shape than other parts of Massachusetts.

“There’s been work in the city of Worcester to streamline the process and things that would take a year to two years elsewhere might take two months here,” he said. “There’s a great deal of energy to address those issues of regulation. The city has scored better marks compared to other communities.”

Locally, there have been improvements, according to Lieutenant Governor, Tim Murray.

“We have had five consecutive months of growth and drop in unemployment,” he said. “We have worked with small businesses and they are a major factor in putting people back to work.”

“I don’t know about the state level, but in Worcester, I think we do a great job for our small businesses,” said City Councilor Tony Economou. “We have taken measures to change parking space, and just passed ordinance for outdoor dining so that we can take advantage of opportunities when we have them. We shouldn’t make rules that are so restrictive that we can’t take advantage of opportunities that come around.”

Small Business Blues

While this may be the case in Worcester, Steve Vaillancourt, owner of Advanced Cleaning, has felt the hardships.

“In my business, I’m so regulated. We go into homes and businesses, and we have to deal with water damages, fire… I can’t even cut a sheetrock wall out unless I have it tested for asbestos,” he said. “It really puts a pinch on me. It slows my process down and costs me to spend more.”

Vaillancourt is aware of where the regulation money ends up and thinks that it would be in the state’s interest to put that money towards helping businesses, so he doesn’t have to charge his customers more.

“It’s generating revenue for the state. I have to test the house for so much stuff, it gets to the point where your pricing is going up. My costs are getting driven up so I have to pass it on to the consumer. I’m seeing more and more of that,” he said. “It’s a hindrance.”

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• Report: Massachusetts Not Business Friendly for Entrepreneurs
• NEW: Sen. Michael Moore Attempts to Reduce Health Care Costs for Small Businesses

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