Salt Lake City — Thumbtack, the modern home management platform, announced results from its 2021 Small Business Friendliness Survey. More than 3,600 small business owners in the home maintenance and construction industries (42 percent) as well as events, lessons, and business services, evaluated federal, state, and local governments. In its tenth year, 44 cities and 43 states received grades from “A+” to “F” on overall small business friendliness, regulations, taxes, and training opportunities.

“The way local professionals have adapted during the pandemic through adoption of digital tools and new safety protocols shows the strength and resilience of service businesses across the country,” says Andrew Heritage, lead economist at Thumbtack. “We’re seeing increased optimism among business owners compared to pre-pandemic levels, but want to acknowledge the near future remains uncertain due to new variants.”

State, federal and city rankings

Maine received the highest state ranking with an “A+” followed by New Hampshire “A+,” South Carolina “A+,” Florida “A,” and Georgia “A-.” While Pennsylvania, Minnesota, Oregon, and Michigan received the lowest scores with an “F.” In comparison, service providers gave the federal government a neutral score with a “C+.”

On a city level, the top-scoring cities on the small business friendliness scale were Jacksonville, FL “A+,” Salt Lake City, UT “A+,” Orlando, FL “A,” Baltimore, MD “A,” and Seattle, WA “A-.” The lowest-scoring cities were Detroit, MI, San Diego, CA, Nashville, TN, and Kansas City, MO, all receiving an “F.”

In addition to overall grades, Thumbtack also ranked states on their support of women-owned and BIPOC-owned businesses. Maryland came in first place with an “A+” as the most supportive state for women-owned businesses and Virginia ranked as the most supportive state for BIPOC owned businesses with an “A+.”

Economic opportunities and challenges

Nationwide, 87 percent of service providers, including women and BIPOC business owners, believe there’s enough economic opportunity in their community for their business to thrive. Up 11 percentage points from 2019, this finding shows increased optimism compared to pre-pandemic levels. And while 41 percent of respondents report generating more revenue in the first half of 2021 than the year prior, challenges remain. Across the board, the costs of operating a business are the biggest roadblock: 33 percent want policymakers to improve access to healthcare/insurance benefits and 45 percent want their tax burden lowered. Additionally, this year, the shortage of qualified labor intensified: 23 percent of businesses reported difficulty hiring with home construction reporting the most difficulty (40 percent).

Communities rally around small businesses

To capture how Americans are supporting their communities, Thumbtack commissioned an additional new Small Business Support survey of 1,150 Americans. Looking to the future, service businesses aren’t the only ones feeling more optimistic, 94 percent of homeowners said they’re comfortable having a professional work inside their home. Additionally, communities around the country rallied to support their local businesses over the last year. Americans gave larger tips (75 percent), made donations (36 percent) and continued paying providers even if they were not receiving services (22 percent).

For complete results, please visit our interactive survey visualization: https://www.thumbtack.com/survey or check out our blog.

2021 Small Business Friendliness Survey Methodology

In a survey of Thumbtack professionals, 3,648 responses were collected nationwide from 6/7/2021 to 7/26/2021 with a margin of error of +/- 2 percent. A sufficient sample size was collected to grade 43 states and 44 metropolitan areas. The eight graded metrics evaluate overall government support, ease of starting a business, ease of hiring employees, labor regulation, tax regulation, licensing regulation, and training and networking programs availability and helpfulness. Thumbtack’s Small Business Friendliness Survey represents the largest continuous study in the U.S. of small business perceptions in the local services industry on government policy.

About Thumbtack

Thumbtack is a technology leader building the modern home management platform. Through the Thumbtack app, homeowners can effortlessly manage their homes — confidently knowing what to do, when to do it, and who to hire. Bringing the $500 billion home services industry online, Thumbtack empowers millions of homeowners to fix, maintain, and improve their most valuable asset. Hundreds of thousands of local service professionals, from painters and plumbers to photographers and math tutors, use the Thumbtack platform to grow their business each year.