Missouri’s friendliness towards small businesses

Aug 20, 2014

Credit Hey Paul Studios via Flickr

 The state of Missouri gets a C grade in it's friendliness towards small businesses according to a survey released in July by thumbtack.com in partnership with the Ewing Marion Kauffman Foundation in Kansas City. But does Columbia fit into this ranking?

Over 12,000 business owners were surveyed across the nation. Businesses were asked about things like existing regulations, tax code, hiring and training and networking programs.

The area where Missouri did the worst was its networking and training programs. Missouri earned an F grade in that area, one of the lowest scores in the country.

“We actually found that's one of the most important factors that helps determine overall small business friendliness,” said thumbtack.com Chief Economist Jon Lieber.

Lieber said oftentimes states will have strong training and networking programs, but people aren’t aware of what’s out there.

Emily Clapp with Belle Bash, a Columbia-based start-up said the city is very invested in people who want to run a business.

“The Chamber of Commerce is very supportive of small business and entrepreneurship; they’ve got programs like Women's Network that encourages women and business, EPIC which encourages young professionals in business. But having a strong chamber is something that Kansas City and St. Louis don't have; they have a lot of smaller chambers, so I think that is an advantage,” Clapp said.

The Small Business and Technology Development Center in Columbia is one of many centers the larger organization has across the state that provide support for businesses. Collin Bunch is with the Columbia Center.

“Our mission is to help people start and grow businesses in Missouri, we work with anyone from idea phase, high school, college student, up through a couple hundred employees, high growth, exporting and kind of everything in between.”

I asked Bunch about the training and networking program in Columbia and he said there’s so much to offer in this city. He mentioned things like 1 Million Cups, the Regional Economic Development Center, the Chamber, but the challenges he said, are with capital and transportation.

“There is a gap in capital for Columbia, and there's one or two shows in town as far as angel stuff. There isn't any real VC, although we've had some VC's make some deals and kind of check out the area...I mean shipping is a problem for a lot of companies, we've found a couple places here in town that will help with shipping and get some better prices. I think transportation as far as you know, there's not a great way to fly into here.”

Back to that ranking, areas that Missouri scored well in were with environmental and zoning regulations. Lieber said a strong score in this area tells us that professionals find the environmental laws not too burdensome, and the zoning laws aren't really getting in the way of the ability for businesses to operate.

“What we heard from a lot of other places was [other than Missouri], there's a lot of complicated rules about where you can put signage up, about parking regulations and a whole bunch of things that just made it hard to set up a physical environment where you want to be in business, and Missouri does better in that than a lot of other states,” Lieber said.

In Missouri there is a lot of discussion about being a low tax state. Missouri received an average C+ grade for the state or local government’s friendliness with regards to tax code.

“So in general what we found is the tax code was far more important than the actual money out of pocket that came from having to pay taxes. So our prose like I said, really wanted to focus on doing their business, building their business, helping their customers, do their craft,” said Lieber.

Basically, businesses said they were more worried about the headache than the actual tax burden itself.

“They just don't want to spend a lot of time trying to follow the rules, so, for the tax code, and what that translates into is, if you have to hire an accountant, if you have to spend a lot of time pouring over tax forms, you have to think about where you're going to remit your taxes, which level you're going to remit them, if you have to do it on a quarterly basis, all these questions really drag down perceptions of overall friendliness amongst our professionals.”

To see full survey results for Missouri and other states, click here.