Small Businesses Award Tennessee A Grade as Nation's #6 Least Costly for Hiring New Employees

June 11, 2012

Article provided by Sander Daniels, co-founder,

State also earns highmarks for business-friendly regulations and tax code

San Francisco, CA, June 11, 2012: Today, in partnership with the Kauffman Foundation, has released new data showing that small businesses rank Tennessee among the top ten leastcostly states nationwide for hiring a new employee.

"Tennessee's greatest asset is that it does not charge income tax to residents. As a small business owner, this makes it easier for me to operate because it is one less tax obligation I have to meet, both for myself and for any employees I might eventually have." — Entertainer, Nashville

There are a lot of "business climate rankings", but there aren't any that draw upon considerable data from small business owners themselves. The Small Business Survey is the only survey to draw data from an extensive, nationwide universe of job creators and entrepreneurs themselves in order to investigate the best places in the country to do business.

"Aftera two-month survey of over 6,000 small business owners nationwide, Tennessee ranked very favorably across a variety of categories," said Sander Daniels, co-founder of "Small businesses continue to feel squeezed by the current economic realities, and state and local policies can mean the difference between success and failure. In a variety of areas, Tennessee seems to be doing a great job helping its small businesses succeed."

Some ofthe key findings for Tennessee include:

  • Tennessee excelled in a variety of categories earning 'A' grades for the small business friendliness of its tax codea and its zoning regulations.
  • Surprisingly, women-owned small businesses in Tennessee felt much more comfortable economically than did their male counterparts. Female entrepreneurs were 38% more likely than male entrepreneurs to rate their company's current financial situation as "good" or "very good".
  • Although Tennessee ranked highly in many categories, it earned only a 'B-' grade for its overall small business friendliness. This is partly the result of Tennessee small businesses' concern over their future economic prospects, for which the state ranked #30 nationwide.
  • Eastern Tennessee is the state's stand-out region, receiving #1 rankings for 5 of the 17 categories rated by small businesses.
  • Small businesses run by liberals seem to be doing significantly better than small businesses run by conservatives. Liberal entrepreneurs in Tennessee were 25% more likely than the state's conservative entrepreneurs to rate their business's financial situation as "good" or "very good".

The full survey results can be seen here and include full sets of rankings, dozens of easily searchablequotes from Tennessee small businesses, regional comparisons within states, andCensus data comparing Tennessee's key demographics against those of otherstates.

"I've had no problems whatsoever in establishing and maintaining my business here in Tennessee. I don't think that I would be as happy anywhere else as I amhere." — CPR instructor,Murfreesboro

Survey Methodology: surveyed 6,022 small businesses across the UnitedStates. The survey asked questions about the friendliness of states towards small business and about small business finances, 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 in your state?"
  • "How would you rate your company's financial situation today?" and Kauffman ranked states and cities against one another along 15 metrics. The full methodology paper can be found here.

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