A Mixed Bag: Detroit’s Small Business Market

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For the past few years, Detroit has been touting its friendliness toward entrepreneurs and small businesses. But recent data shows that the city could be doing a better job at attracting new industries into the region.

Thumbtack.com partnered with the Kauffman Foundation and just released their annual study on small business friendliness. The rankings are based on a survey of more than 7,700 small business owners nationwide, like photographers, plumbers, and graphic designers.

Here is how Detroit and Michigan fared:

  • Detroit received higher marks in almost every category compared to 2012’s results. However, the city still struggled in some areas.
  • Detroit earned an ‘A-‘ for its small business training and networking programs and a pair of ‘B’ grades for its licensing requirements and labor regulations. However, it also received a ‘D+’ for the ease of starting a new business in the city.
  • Michigan’s performance was almost identical to that of 2012, again earning a ‘D’ for overall small business-friendliness.
  • Michigan’s small businesses also reported higher than average hiring plans for 2013, particularly important given the state’s continued struggle with high unemployment.
  • Northern Michigan was the highest ranked region of the state for the second year.
  • African-American and Hispanic small business owners were more likely than their white counterparts to encourage others to start a new business.
  • The top ranking cities overall were Austin, Virginia Beach-Norfolk, Houston, Colorado Springs and San Antonio.  The lowest rated were Los Angeles, San Diego, Cincinnati, Sacramento and, in last place, Newark, NJ.

What is really interesting about this study is that even though it’s difficult to start up a new business in the region, the talent pool, career development, and training is higher than most regions around the rest of the U.S. That’s a good sign, since a key indicator for business growth is how much companies are investing in their own people.

Now, if we could just cut through some of the red tape and help these entrepreneurs get a foothold in our economy, we’ll all be better for it.

You can see Detroit’s full results here: www.thumbtack.com/mi/detroit

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