Today, we released our fifth annual Thumbtack Small Business Friendliness Survey. 12,169 U.S. small business owners participated in the 2016 study, collectively grading 35 states and 78 cities on the government policies that affect their businesses. The skilled professionals we surveyed operate in a variety of industries, including as electricians, music teachers, wedding planners, wellness professionals, and more. It is the largest continuous study of small business perceptions of government policy in the United States.

1. Small Business
Friendliness Survey
2016
By Lucas Puente, Economist, Thumbtack

2. 2Thumbtack Small Business Friendliness Survey | 2016
TABLE OF CONTENTS
Executive Summary 02
Small Business Friendliness Survey:
Public Policy and the Skilled Professional
03
Policy Priorities for the Skilled Professional 04
In Five Major American Cities, Regulation
Is a Top Policy Priority
05
Who Is the Skilled Professional? 06
Meet the Skilled Professionals 07
Case Study: Atlanta 09
Case Study: Austin 10
Case Study: Boston 11
Case Study: Minneapolis 12
Case Study: San Francisco 13
Connect with Thumbtack 14
Executive Summary
Conducted since 2012, the Thumbtack Small Business Friendliness Survey
is the largest continuous study of small business perceptions of government
policy in the United States. The 2016 study reached 12,169 skilled professionals
nationwide, including electricians, music teachers, wedding planners, wellness
professionals, and others operating in a variety of industries. These entrepreneurs
graded the state and local public policies that affect small businesses.
In the fifth year of the study, skilled professionals signal clearly that governments
must make regulations straightforward and easy to follow—especially those
surrounding licensing, taxes, and employment. Small businesses see these types
of regulations as their biggest impediment to starting, growing, and sustaining
a thriving business. Simplistic fixes such as lower tax rates don’t make a big
difference in overcoming these challenges.

3. 3Thumbtack Small Business Friendliness Survey | 2016
Small Business Friendliness Survey:
Public Policy and the Skilled Professional
Across the U.S. economy, business establishments are getting smaller and
leaner, and automation is replacing many routine jobs that once provided
a stable middle-class income for millions of people. But enterprising skilled
professionals in fields from photography to plumbing are adapting to broader
economic transformation by starting their own businesses. The number of
professionals who develop and use specialized skill sets in nonroutine trades
has grown 34 percent in the past 15 years—and this trend is accelerating:
Small firms have accounted for 60 percent of net new jobs since the recession.
Unfortunately, the path of the independent skilled professional isn’t always
easy: Small businesses consistently cite “finding new customers” as a top
concern, searching for new leads every day.
Thumbtack addresses this challenge by applying technology to connect
skilled professionals to customers seeking their services to get things done.
Still, complicated regulations and obscure bureaucratic processes can
discourage talented entrepreneurs from starting a business or curb existing
businesses from expanding their workforce. To better understand these issues,
Thumbtack has fielded a comprehensive survey every year since 2012 about
the policy factors that help and hinder small businesses. This report provides
unique data to local policymakers on what they can do to help skilled
professionals succeed and thrive in a competitive marketplace.
In honor of the survey’s fifth year running, this special report showcases the top
policy factors that have surfaced throughout the years we have run this survey.
The report also includes five case studies of cities that have had varying levels
of success providing a friendly business climate for skilled professionals.
The case studies reveal that small business owners typically care much less
about the policy initiatives many local governments have prioritized—such as
tax breaks and downtown revitalizations—and much more about regulations,
training programs, and government websites that impact their day-to-day
operations. We encourage cities to learn from each other how best to support
the individuals who will become the new middle class and power the future
of the American economy.
To read the formal report and methodology, visit https://www.thumbtack.com/
survey.

4. 4Thumbtack Small Business Friendliness Survey | 2016
LICENSING More than any other issue, skilled professionals are affected by
licensing requirements—forms and fees needed to start and run
a business. For many, the occupational licensing experience
(obtaining and complying with rules) can be another hurdle.
TAXES On the local tax level, tax regulations are the top priority for skilled
professionals; they hold their local leaders more accountable for
these rules and for their tax complexity than they do for their tax rate.
LABOR
REGULATIONS
Labor regulations on hiring and employment are key for skilled
professionals looking to expand. They want to see policies that
make it as easy as possible to hire new workers.
HEALTH
& SAFETY
Health and safety regulations range from insurance rules for
employees to safety codes affecting business operations.
They particularly affect small businesses in home improvement
and wellness.
ZONING By making the process of complying with local zoning policies and
acquiring building permits more straightforward, policymakers
can make it much easier for skilled professionals to start and run
their businesses.
TRAINING Training and networking opportunities—offered by chambers of
commerce, local government agencies, and organizations such
as the Small Business Administration—are valuable to skilled
professionals looking to hone their craft, run their business better,
or meet industry colleagues.
ENVIRONMENTAL
RULES
Environmental rules affect skilled professionals across a range
of industries, especially home improvement, moving, landscaping,
and even event planning. Such rules can be seen as a burden by some
of the small businesses they touch.
WEBSITE Government websites often help small businesses comply with
regulations on their business or provide information about operating
in the community. Governments that offer informative, easy-to-use
website experiences tend to be rated more highly.
Policy Priorities for the Skilled Professional
What makes small businesses rate their governments as friendly?
The following measures of government policies toward and support for small
business are listed in order of their influence on this year’s grades and rankings.
This is the skilled professional’s policy priority list.

5. Thumbtack Small Business Friendliness Survey | 2016 5
In Five Major American Cities, Regulation
Is a Top Policy Priority
We examined five cities to better understand how policy preferences compare
across different parts of the country. These cities—Atlanta, Austin, Boston,
Minneapolis, and San Francisco—don’t just represent different regions; they
also represent the full spectrum of performance on our survey. Atlanta and
Austin were among the highest-rated cities by their skilled professionals, while
San Francisco was among the lowest, and Boston and Minneapolis were close
to the average.
Despite these differences, small businesses in these cities had similar policy
priorities. In each of the five, regulations were a near ubiquitous concern. Cities
deemed to have friendly regulatory regimes also earned high overall scores.
And in all five cities, respondents who had good experiences with government
resources such as training programs and government websites tended to rate
their cities as more friendly to small businesses.
1
11
B-
Minneapolis
A
Atlanta
B
Boston
A-
Austin
F
San Francisco

6. 6Thumbtack Small Business Friendliness Survey | 2016
Who Is the Skilled Professional?
Diverse, technology-savvy, and specialized.
Compared with American small businesses overall, the skilled professionals
who use Thumbtack are more diverse across race and gender and more
likely to own a business at a younger age. They are also tech-savvy:
81 percent use mobile devices to build client relationships.
Active duty 2%
Veteran 10%
Never served 88%
Moderate
Liberal
Do not
affiliate
Conservative
14% 24%
31%
31%
Home improvement 42%
Personal services 18%
Events & weddings 17%
Professional services 12%
Wellness 6%
Lessons 5%
Under
25
6%
25–34
25%
35–44
27%
45–54
25%
55–64
14%
65 and
over
3%
60%
Men
40%
Women
60%
21 or more
2 to 5
11 to 20
6 to 10
1 (I work alone)
2%
2%
5%
31%
Less
than 1
year
1–2
years
3–4
years
More
than 5
years
23% 23%
16%
38%
High school or GED 29%
4-year degree 30%
Advanced degree 16%
No high school 1%
Associate's degree 24%
67%
White or
Caucasian
14%
10%
7%
14% Black or
African American
10% Hispanic
Latino or Spanish
7% Other
2% Asian
EMPLOYEES
POLITICAL AFFILIATION
AGE
INDUSTRY
GENDER
YEARS IN BUSINESS
ETHNICITY EDUCATION LEVEL VETERAN'S STATUS

7. 7Thumbtack Small Business Friendliness Survey | 2016
Meet the Skilled Professionals
Entrepreneurs in every zip code, across 1,100+ categories.
Skilled professionals are using new technologies to build thriving businesses
and do what they love. Most of them are building full-time businesses,
not earning side income. While traditional work is increasingly outsourced
and automated, skilled professionals resist these trends because they offer
specialized, nonroutine skills. They are the future of the middle class.
Here, five skilled professionals from a range of industries and cities share
how local government has impacted their business.
Computer Service Provider
Thumbtack pro since 2014
Location: Atlanta, Georgia
Bruce
Parks
“I was able to register my business,
get zoning approval, pay fees, and
get my business license in a couple
of hours. I went during the middle
of the week and had no problem
getting my business license that day.”
Photograph by Paul Ward
Marketing and Media Consultant
Thumbtack pro since 2013
Location: Austin, Texas
Christian
Ray
“We moved our business from Los
Angeles to Austin because of how
friendly the state and city are to
what we do. From starting a
business to paying taxes and hiring
people, Austin is the place to be.”
Photograph by Alex Fitch

8. 8Thumbtack Small Business Friendliness Survey | 2016
Home Organizer
Thumbtack pro since 2015
Location: Boston, Massachusetts
Melanie
Cerio
“SCORE is a phenomenal resource,
both the mentorship program and
the workshops. Boston’s innovation
centers, i.e., Harvard I-lab and
District Hall, have offered
informative and excellent
opportunities to network with other
entrepreneurs and potential clients.”Photograph by Bethan Brome
Wedding Planner
Thumbtack pro since 2014
Location: Minneapolis, Minnesota
Katherine
Minks
“Local chambers in Minnesota could
be more referral-centric to small
businesses. There could be more
local networking groups that refer
internally and use each other.”
Photograph by Liam Flahive
Fitness Trainer
Thumbtack pro since 2015
Location: San Francisco, California
Alicia
Ruth
“I primarily use public spaces for
outdoor fitness training. The city
maintains beautiful public parks
and neighborhoods that I work
in. I’ve used the SCORE and
Renaissance Business Centers
for workshops and education.”
Photograph by Kevin Malmgren

9. 9Thumbtack Small Business Friendliness Survey | 2016
ATLANTA
https://www.thumbtack.com/ga/atlanta/
Not
applicable
Friendly
Neutral
Unfriendly
8%
49%
17%
26%
rate health safety
regulations as unfriendly
7%42% 39%
11% 8%
Used one; it was
difficult to use
Used one; it was
neither easy
nor difficult
Used one; it was
easy to use
Never used one
40% 54%
Too high
About right
6%
Too low
Not
applicable
Friendly
Neutral
Unfriendly
10%
42%
15%
33%
HEALTH SAFETYLICENSING REQUIREMENTS WEBSITE EXPERIENCE TAX REGULATIONSTAX RATES
Atlanta earned an A+ for
tax regulations, with 42%
of locals finding the
regulations friendly.
Only 4% said they are
“very unfriendly.”
Health and safety
regulations earned another
A+ for Atlanta. About 48%
of local businesses found
these rules “friendly,”
beating the national
average by 25%.
Approximately 40%
of Atlanta’s small
businesses said their
tax rate is too high, 19%
fewer than the national
average. 54% said their
rate is “about right.”
In Atlanta, 58% of
respondents said they
have used government
websites, rating the
experience a B+. One-
third of those users
went online to register
a new business.
Licensing regulations in
Atlanta earned an A+.
Locals were 26% more
likely to find licensing
rules friendly than in
other U.S. cities.
Atlanta Report Card
The five most important factors in Atlanta’s Small Business Friendliness grade.
Atlanta’s overall score was heavily influenced by business owners’ ratings of their
licensing requirements, website experience, and tax rates.
A
Georgia’s largest city earns top marks for its business friendliness.
Skilled professionals rank Atlanta among the country’s top cities for
small business, calling it “business-friendly” and its policies “helpful.”
This year, the city received its highest grade since 2012, earning
exceptionally strong ratings on every regulatory metric we studied.
Its A grades were a marked improvement from last year, when it
scored no higher than a B+ on these measures.
Small businesses said Atlanta can still improve its training programs.
Fewer business owners in Atlanta knew of training or networking
events; those who had participated rated them less favorably.
• 18% want easier access to credit
• 52% are aware of helpful
training programs
• 42% are required to have
a license or permit
• 69% say licensing compliance
is well-enforced
• 48% say they’d like more
networking opportunities
OVERALL GRADE

10. 10Thumbtack Small Business Friendliness Survey | 2016
AUSTIN
https://www.thumbtack.com/tx/austin/
25%
28%
17%
30%
Not
applicable
Friendly
Neutral
Unfriendly
Friendly Neutral
UnfriendlyOther
35%
19%
7%
39%
Friendly Neutral
UnfriendlyNot
applicable
35%
9%
20%
36%
Not
applicable
Friendly
Neutral
Unfriendly
7%
42%
21%
30%
rate labor regulations
as friendly
33%
LABOR REGULATIONSHEALTH SAFETY LICENSING REQUIREMENTS ENVIRONMENTAL RULESTAX REGULATIONS
Austin earned a B- for
environmental rules, and
17% of local businesses
found these rules
unfriendly to their
business, compared with
a national average of 15%.
Austinites were 30% less
likely than the national
average to say labor,
employment, and hiring
rules are “unfriendly.
The regulations earned
a B+.
With an A-, Austin’s tax
regulations were seen as
9% more friendly than the
national average, and only
19% of Austinites found
these rules unfriendly.
Licensing rules are
considered friendlier in
Austin than in other U.S.
cities and were rated B+
by locals. Approximately
42% said these rules
were friendly.
Health and safety rules,
perceived as mostly
neutral or friendly, earned
a B. While 8.5% said these
rules are “unfriendly,”
that’s 32% less than the
national average.
A-
The capital of the No. 1 friendliest state for small business earns
consistent high marks.
Skilled professionals in the Lone Star State’s capital call Austin “an easy place
to do business” and “a great place for startups.” For five years in a row, Austin
has rated among the top cities in the United States in Thumbtack’s Small
Business Friendliness Survey, thanks to above-average ratings from business
owners on regulations and training programs.
Though Austinites are generally pleased with their city’s policy environment,
they expressed some frustration with local government websites for registering
new businesses, calling them “confusing” and rating them among the worst in
the country. Their advice to policymakers: Focus on informing and supporting
businesses in addition to providing a strong regulatory environment.
• 30% want policymakers
to lower or simplify taxes
• 62% are aware of training
programs
• 29% are required to have
a license or permit
• 40% want business
development trainings
• 64% say licensing compliance
is well-enforced
Austin Report Card
The five most important factors in Austin’s Small Business Friendliness grade.
The top policy priorities in Austin revolved around regulations; a B grade on the
primary concern—health and safety regulations—dragged down the city’s overall
strong score.
OVERALL GRADE

11. 11Thumbtack Small Business Friendliness Survey | 2016
BOSTON
https://thumbtack.com/ma/boston/
rate tax regulations
as friendly
32%
Friendly Neutral
UnfriendlyNot
applicable
34%
27%
12%
27%Not
applicable
Friendly
Neutral
Unfriendly
21%
39%
14%
26%
Not
applicable
Friendly
Neutral
Unfriendly
28%
26%
21%
25%
Not
applicable
Friendly
Neutral
Unfriendly
30%
24%
20%
26%
Locals gave tax regulations
a B. They were only
slightly more likely than
the national average to
say that local tax
regulations are “friendly.”
Bostonians were 14%
more likely to report that
local zoning policies are
“unfriendly” and 14% less
likely to say zoning is
“friendly” vs. the national
average.
Bostonians were 35%
more likely to say that
local environmental rules
are “unfriendly” than
other cities, giving the
city a C- on this metric.
Only 34% of small
business owners in
Boston said licensing
requirements are
“friendly,” which is 12%
lower than the national
average of 39%.
About 39% of Bostonians
called health and safety
regulations “friendly,”
on par with the national
average. These rules
earned a B from local
businesses.
ZONINGHEALTH SAFETY LICENSING REQUIREMENTS TAX REGULATIONSENVIRONMENTAL RULES
B
Massachusetts capital earns highest-ever score but draws mixed reviews.
Skilled professionals gave Boston mixed ratings; some called its policies
“straightforward,” others “inefficient.” Still, the overall B grade it earned
this year is its highest-ever score: Its previous high watermark was a C.
Positive scores for Boston’s health and safety regulations and tax regime
offset below-average scores on other regulatory measures, such as
licensing requirements, environmental rules, and zoning. Locals were
also less enthusiastic about the training programs and government
websites in their community than the national average.
• 31% want policymakers
to lower or simplify taxes
• 57% are aware of helpful
training programs
• 35% are required to have
a license or permit
• 75% say licensing compliance
is well-enforced
Boston Report Card
The five most important factors in Boston’s Small Business Friendliness grade.
Boston’s overall B rating was driven most by business owners’ ratings of the city’s
regulatory regime—most importantly, its health and safety regulations.
OVERALL GRADE

12. 12Thumbtack Small Business Friendliness Survey | 2016
MINNEAPOLIS
https://www.thumbtack.com/mn/minneapolis/
Not
applicable
Friendly
Neutral
Unfriendly
11%
34%
26%
29%
rate tax regulations
as unfriendly
31%rate labor regulations
as unfriendly
22%
Friendly Neutral
UnfriendlyNot
applicable
36%
14%
19%
31%
Not
applicable
Friendly
Neutral
Unfriendly
23%
29%
18%
30%
More respondents in
Minneapolis said that the
tax code and related
regulations are
“unfriendly” than
“friendly.” In other U.S.
cities, the opposite is true.
Although more locals said
licensing regulations are
“friendly” than
“unfriendly,” the city was
less positive on licensing
than the nation overall.
Environmental rules in
Minneapolis are seen as
slightly less friendly than
in other cities. About
29% of locals said rules
are “friendly,” while 18%
said they’re not.
Locals gave a B- to health
and safety rules: 14% of
small business owners
called them “unfriendly,”
which is 13% more than
the national average.
About 23% of
Minneapolis small
businesses said labor
rules are “unfriendly,”
which is 40% more than
the national average,
earning the city a C.
LICENSING REQUIREMENTSLABOR REGULATIONS HEALTH SAFETY TAX REGULATIONSENVIRONMENTAL RULES
B-
OVERALL GRADE
Minnesota’s capital earns average scores from small businesses.
Skilled professionals in Minneapolis offered diverse feedback: Some
called local policies supportive, but others lamented “burdensome” rules
and higher-than-desired tax rates. Concerns over regulatory policies led
to a B- for Minneapolis for the second year in a row (compared with an
A in 2014). The city drew average or below-average ratings on the six
regulatory policies that we measured: Most regulations earned C grades.
The city’s training programs and useful government websites lifted its score
somewhat. Far more businesses in Minneapolis used these resources—and
benefited from their experiences—than the national average.
• 38% want policymakers to
lower or simplify taxes
• 60% are aware of helpful
training programs
• 71% have used a government
website
• 60% of website users found
them easy-to-use
• 64% say licensing compliance
is well-enforced
Minneapolis Report Card
The five most important factors in Minneapolis' Small Business Friendliness grade.
Skilled professionals’ ratings of regulations—especially those related to labor and
health and safety—drove the city’s overall B- grade.

13. 13Thumbtack Small Business Friendliness Survey | 2016
SAN FRANCISCO
https://www.thumbtack.com/ca/san-francisco/
F
Friendly Neutral
UnfriendlyNot
applicable
23%
17%
36%
24%
rate zoning
as friendly
21%rate licensing regulations
as unfriendly
35% Not
applicable
Friendly
Neutral
Unfriendly
25%
26%
20%
29%
Not
applicable
Friendly
Neutral
Unfriendly
26%
29%
18%
27%
ZONINGLICENSING REQUIREMENTS LABOR REGULATIONS ENVIRONMENTAL RULESHEALTH SAFETY
Only 23% called
environmental rules
“friendly,” which is 26%
lower than the national
average. And 17% said
they are “unfriendly,”
which is 10% more than
the national average.
Zoning earned a D+ from
small business owners.
Respondents in other U.S.
cities were 33% more
likely to call their rules
“friendly” than those in
San Francisco were.
Locals gave the city a D+
on health and safety
rules. They were 45%
more likely to call these
rules “unfriendly” than
the national average.
About 20% of San
Franciscans reported that
labor, employment, and
hiring regulations are
“unfriendly,” which is 22%
more than the national
average.
Approximately 27% more
locals called licensing
rules “unfriendly” than
“friendly.” In other U.S.
cities, licensing was 60%
more likely to be seen as
“friendly” than “unfriendly.”
• 26% want policymakers
to lower or simplify taxes
• 56% are aware of helpful
training programs
• 55% have used a government
website
• 42% of government website
users found them easy-to-use
• 42% are required to have
a license or permit
The city by the bay was rated among the least friendly nationwide.
Skilled professionals in San Francisco complained of bureaucratic hurdles,
costly fees, and substandard online resources for small businesses.
The unfriendliness of licensing forms, requirements, and fees was the
primary concern for this community: Many complained specifically about
high licensing fees. As a result, San Francisco’s rating on this dimension
was the second worst in the country.
San Francisco did receive glowing reviews on its training programs. Use
rates and reviews of these programs were both far above the national
average—and that’s particularly true for business development programs.
San Francisco Report Card
The five most important factors in San Francisco's Small Business Friendliness grade.
Skilled professionals’ ratings of regulations—especially those related to licensing,
labor, and health and safety—drove the city’s overall F grade.
OVERALL GRADE

14. Thumbtack Small Business Friendliness Survey | 2016 14
Connect with Thumbtack
About the Author
Lucas Puente
Lucas Puente is the Economist at Thumbtack, where
he studies Thumbtack's marketplace dynamics and
the policy challenges facing small service businesses.
Passionate about using data to better understand the
American economy, Lucas’ previous research topics
include decision-making at the Federal Reserve and
the role of technology in the contemporary labor
market. He has master's and doctorate degrees from
Stanford University and is a graduate of the University
of Georgia.
Acknowledgments
This report was made possible by more than 12,000 Thumbtack professionals who
responded to the 2016 Small Business Friendliness Survey to rate their local government
policies and voice their opinions on how local governments can support entrepreneurship.
We are particularly grateful to the five skilled professionals featured in this report and
to the independent photographers who captured them at work. Jon Lieber, former
chief economist at Thumbtack, provided insight and expertise that greatly assisted
the development of this study.
To learn about results for your local state or city
government, visit https://www.thumbtack.com/
survey and click your location on the map. You can
read the full methodology at https://www.thumbtack.
com/blog/2016-friendliness/.
Thumbtack connects people who need to get things done with the right skilled
professionals to help them complete their projects. More than 230,000 professionals in
almost 1,100 unique categories—ranging from handymen and housekeepers to tutors,
photographers, wedding planners and more—use Thumbtack to connect with millions of
customers, collectively generating more than $1 billion in annual business revenues for
professionals across all 50 states. For more information, visit https://www.thumbtack.com/.