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Author Topic: Small Business Friendly States  (Read 16800 times)

Otosan

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Small Business Friendly States
« on: July 31, 2002, 06:56:39 pm »

An artical I found that could be used in helping to determine which state to move to?
States ranked by policies toward small businesses
----------
CNS
The Small Business Survival Committee, a small-business advocacy
group, says the most entrepreneur-friendly states, which refrain
from excessive regulation, include South Dakota followed by
Nevada, Wyoming, Texas, and Florida. (07/31/02)
http://www.free-market.net/rd/220971912.html
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Dex Sinister

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Re:Small Business Friendly States
« Reply #1 on: July 31, 2002, 09:21:44 pm »

A more useful link might be http://www.sbsc.org

The report, in PDF format is here:
http://www.sbsc.org/Media/pdf/SBSI2002A.pdf

Dex }:>=-
« Last Edit: July 31, 2002, 09:22:52 pm by Dex Sinister »
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Dex Sinister

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Re:Small Business Friendly States
« Reply #2 on: July 31, 2002, 09:33:11 pm »

Also potentially useful is Morgan Quinto's 2002 "Livability Index," which pulls a few different state stats to look at:


http://www.morganquitno.com/sr02mlrnk.htm

Dex }:>=-
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Solitar

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Getting states to invite the FSP
« Reply #3 on: September 30, 2002, 01:19:16 am »

The FSP could present itself as a representative of small businesses wishing to move to a state and thus it is looking for the most business friendly environment.

Small business is the creator of most of the jobs in a growing free economy. Many of the areas the FSP is considering need as friendly an environment for small business as possible - major portions of these states are economically depressed - from their own doing! Often I've talked with small businesses here who struggle against the local planning and zoning codes, building codes, and fire codes. Most, if not over 90% of potential Free State activists may have no idea just how repressive the locally imposed (and politically motivated) codes are unless they've tried to start a small business -- especially if there is any significant remodeling or "change of use" of a building. Sure the states authorize the codes, but that does not mean the town, city, or county have to impose them.

To the target states - do you want the FSP to give you economic help or not? That is the same question posed by individual businesses when they negotiate with communities and states. They often also ask "what can you do for us?"  The FSP does not ask for tax incentives, free land and buildings, job training, etc. -- it only asks for less restrictive codes -- or the FSP will look elsewhere for a home for its thousands of small businesses it is bringing to the chosen state. Does this sound hardball? It's far less "hardball" than what major corporations demand from candidate states or cities in return to locating there. Colorado passed special state laws just to lure United Airlines facilities here or to build a sports stadium or international airport.

Does the FSP have the economic strength - measured in small businesses it can deliver -- to get one of the candidate states to invite the Free State Project to choose it, to court the FSP with offers of legislative accomodation?
« Last Edit: September 25, 2003, 08:59:45 pm by Joe, aka, Solitar »
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Robert H.

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Re:Getting states to invite the FSP
« Reply #4 on: September 30, 2002, 08:38:36 am »


Does the FSP have the economic strength - measured in small businesses it can deliver -- to get one of the candidate states to invite the Free State Project to choose it, to court the FSP with offers of legislative accomodation?


Good question...it's possible that we may be so concerned about states notwanting us to come that we may be overlooking reasons why they might actually want us to come after all.  It's definitely worth exploring.

As far as getting them to actively court us, we'd probably be narrowed down to the states with the worst economies (as they'd anticipate that we'd bring new businesses, increased demands for goods and services, etc).  If I remember correctly, Wyoming is on the bottom of the economic totem pole.  They might be interested in what the FSP could offer.  We could always get in touch with libertarians or conservatives out there, especially those in state government, and find out.

mdw

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Re:Small Business Friendly States
« Reply #5 on: September 30, 2002, 11:54:52 pm »

From the link provided by Dex, http://www.sbsc.org/Media/pdf/SBSI2002A.pdf

I have removed the rankings of states not being considered by the FSP. Note that a lower SBSI score is better- SBSI stands for Small Business Survival Index. The ranking is out of the total 50 states.

RankStateSBSI Score
1South Dakota21.080
3Wyoming27.640
6New Hampshire31.010
21Alaska40.360
23Delaware41.070
28Idaho43.510
35North Dakota47.025
38Montana47.994
42Vermont49.454
49Maine53.810

This rating is arrived at using factors which are similar to some of the factors in the FSPs state data comparison matrix. All of the following is from the report:

The Small Business Survival Index ties together 20 major government-imposed or government-related costs impacting small
businesses and entrepreneurs:

• Personal Income Tax
• Capital Gains Tax
• Corporate Income Tax
• Individual Alternative Minimum Tax
• Corporate Alternative Minimum Tax
• Indexing Personal Income Tax Rates
• Property Taxes
• Sales, Gross Receipts and Excise Taxes
• Death Taxes
• Unemployment Tax Rates
• Health Care Costs
• Electricity Costs
• Workers’ Compensation Costs
• Total Crime Rate
• Right to Work
• Number of Bureaucrats
• Tax Limitation States
• Internet Taxes
• Gas Tax
• State Minimum Wage

These measures are simply added together (for example, as was the case with the old “misery index”) into one index number—the Small
Business Survival Index. Obviously, other costs are imposed on entrepreneurs and businesses at the state and local levels. Still, the Small Business Survival Index manages to capture much of the governmental burdens impacting critical economic decisions—particularly affecting investment and entrepreneurship—state by state.

(Edit performed to organize data into a table.)
« Last Edit: October 01, 2002, 01:46:44 am by mdw »
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Solitar

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Re:Small Business Friendly States
« Reply #6 on: October 01, 2002, 12:21:00 am »

The low, and thus good, score for Wyoming is a quandary. There was quite the flurry of great hopes from that state a few years ago. We need to understand the candidate states' economies better (just as my compatriots must try to understand our economy better). Cutting the red tape, regs, codes, etc. seems to only go so far - and often not far enough. There are other factors involved. Perhaps the FSP's more experienced business people can help figure those out -- and they need to be figured out because if Free State activists promise a booming economy after degregulation -- and it does not happen, then the Free State idea takes a major hit to its political credibility.

Can the FSP find and recruit businesses and manufacturers that would be willing and able to move to the Free State? Would a promise of an even better political environment be enough? What else would they need to succeed and thus help the FSP succeed? I don't have the answers or I would be able to better help my own town.
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mdw

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Re:Small Business Friendly States
« Reply #7 on: October 01, 2002, 01:38:20 am »

I was in the process of pulling some relevant data even as Joe was posting his thoughts. I believe that this data when combined with the Small Business Survival Index provides a good starting point to asses the economic viability of a given state for small businesses.

The data below is the Gross State Product for each of the FSP candidate states. The GSP is defined by the Bureau of Economic Analysis as the value added in production by the labor and property located in a state. It does take into account capital. It is essentially a total of the economic output of each state. The GSP figures displayed below are for "Private Industries", which means economic output produced by the private sector. Obviously, it excludes expenditures made by state and local governments.

The GSP figures are in millions of dollars, and reflect data for 2000.













RankStateGSP
1New Hampshire44,024
2Delaware33,000
3Idaho32,190
4Maine30,890
5Alaska22,451
6South Dakota20,251
7Montana18,190
8Wyoming16,705
9Vermont16,016
10North Dakota15,647


(The rank is simply the ordering based on total GSP within the FSP 10 state candidate group.)

--Pulled from http://www.bea.gov/bea/regional/data.htm
Click on GSP interactive access and select the states and data you wish to display
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Solitar

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Re:Small Business Friendly States
« Reply #8 on: October 01, 2002, 04:08:12 pm »

mdw,
Thanks for the above GSP numbers.
And really mucho thanks for the source of lots more numbers for states, counties, & cities!

Here are the SBSI scores compared to GSP on a per capita basis
Delaware and Alaska seem to do well in spite of their poor SBSI scores - thus they may be poor candidates for efforts to improve the business climate -- they'll say "Why? We're doing okay the way we are!" Vermont also is doing better than its score would suggest -- maybe because of a great location next to New Hampshire.

The bottom five have bad scores and poor per capita GSP -- lots of room for improvement, especially for Montana and especially when compared to Wyoming and South Dakota who likely have similarly bad geographic disadvantages but have overcome them with a much better SBSI - especially Wyoming (thus my comment above is amended because Wyoming could have been as bad off as Montana if its SBSI score was similarly as poor).

SBSI     GSP per capita
41.1   $42,113    Delaware   ($33,000 million for 783,600 people)
40.4   $35,811    Alaska   ($22,451 million for 626,932 people)
31.0   $35,624    New Hampshire   ($44,024 million for 1,235,786 people)
27.6   $33,831    Wyoming   ($16,705 million for 493,782 people)
21.1   $26,828    South Dakota   ($20,251 million for 754,844 people)
49.5   $26,306    Vermont   ($16,016 million for 608,827 people)
43.5   $24,883    Idaho   ($32,190 million for 1,293,653 people)
47.0   $24,365    North Dakota   ($15,647 million for 642,200 people)
53.8   $24,229    Maine   ($30,890 million for 1,274,923 people)
48.0   $20,162    Montana   ($18,190 million for 902,195 people)

Additional observation for this thread
Perhaps over here we can discuss the economic/business criteria for choosing a state.
Then the "how" to help a state help the FSP and how the FSP can help a state can be discussed at:
What can the FSP offer to get states to court it?  Businesses & Jobs?
http://forum.freestateproject.org/index.php?board=3;action=display;threadid=488
« Last Edit: October 01, 2002, 05:53:25 pm by Joe, aka, Solitar »
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mdw

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Re:Small Business Friendly States
« Reply #9 on: October 01, 2002, 11:52:58 pm »

Joe et al.-

There are two ways to interpret the above data:
1. Seek out that state which can most benefit from the free market minarchist ideas the FSP will attempt to implement.
2. Seek out the most prosperous state which still meets the general criteria of the FSP, so as to prosper as soon as possible and have a strong economy into which we can integrate.

It is clear from the data which states fall into which of the above two approaches. MT is the frontrunner in category 1. NH appears to be the best contender in category 2.

However, I must admit that I am unsure which path will yeild the best long term results. I am curious what others think- should the FSP select a state which would most benefit from its economic principles, or should we choose to move to a state where we can begin to prosper as soon as we hit the ground? I think it is obvious that choosing a state like MT would require much more political work while having to provide for one's economic well being in a somewhat depressed environment.

Regards,
mdw
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glen

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Re:Small Business Friendly States
« Reply #10 on: October 02, 2002, 06:58:52 am »

Do the Delaware numbers reflect actual business operating in the state or all business incorporated by the state?

This may be an important distinction as Delaware is the countries leading state for business incorporation and apparently most of the Delaware corporations conduct their business in some other state.
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JasonPSorens

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Re:Small Business Friendly States
« Reply #11 on: October 02, 2002, 07:18:57 am »

I do know GSP figures are for actual production occurring in state.  They're the analogue of GDP figures for countries.  (GNP, by contrast, measures income earned by US nationals all over the world.)
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wilaygarn

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Re:Small Business Friendly States
« Reply #12 on: October 12, 2002, 09:49:48 pm »

I slipped up and posted the following in the "Other Criteria" section, but let me try again:


I think something like this may be posted elsewhere, but I found this on a surveyor's bulletin board tonight:

Best and worst states to run a small business
Posted By John Giles on 10/11/2002 at 11:48 PM
The top 10

1. Nevada

2. Florida

3. Texas

4. Alabama

5. (tie) Virginia, Arizona

7. Tennessee

8. Colorado

9. South Carolina

10. Georgia

Close behind: New Hampshire, Delaware, Maryland, Utah

And the bottom 10:

50. Iowa

49. Maine

48. New Mexico

47. New York

46. Montana

45. North Dakota

44. Nebraska

43. Vermont

42. (tie) West Virginia, Rhode Island, Hawaii

On the bubble: Minnesota

Here is the link:

http://www.bcentral.com/articles/harper/141.asp?cobrand=msn&LID=3800

To think I could be doing just as good with my business in Hawii.





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Solitar

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Re:Small Business Friendly States
« Reply #13 on: November 01, 2002, 05:41:19 am »

Wilaygarn,
The Free State activists could put any state they choose at the top of the top ten.
Wyoming, starting from a very dismal situation a decade ago, seems to be making a lot of improvement in spite of it all. There was a major push several years ago to turn its economy around and I was wondering why it still looked poor in comparison to other states. It is where it started from and how much it has improved which is impressive. Eventually I foresee a large potential for the Cheyenne area to benefit from Colorado's economic and population growth. Eventually the hoards from the Denver/Boulder/Fort Collins area will spread north. The FSP could prevent happening to Wyoming what Massachusetts is doing to New Hampshire.
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Jacobus

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Re:Small Business Friendly States
« Reply #14 on: November 01, 2002, 08:29:38 am »

Well, one area where the free state would automatically and necessarily improve the state's economy is if the surrounding states have a sales tax (and I'm assuming a state sales tax would be fast to go under a free state administration).  I don't know the sales tax situation of the western states, but here New Hampshire has none and is surrounded by states that do.  So in Massachusetts, New Hampshire has a reputation as the place to go shopping if you don't want to pay so much.  You might be surprised how far people would drive if they are planning to spend a few hundred dollars.  If someone pays $500 for an item, they'll save something like $30 if they buy it in NH as opposed to MA.  I think this is one of the reasons Nashua, NH has so many stores (it's on the border with MA).
This might be different in the west though if the nearest population center is a neighboring state is 600 miles away.  
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