Survey reveals the struggle of small businesses in Boston

Thumbtack, an online service that pairs small service businesses with customers, recently graded the Hub.

Things can be tough for small Boston business owners.
Things can be tough for small Boston business owners. –Getty/The Boston Globe

Just how happy are small business owners in Boston? If you ask Thumbtack, an online service that pairs small service businesses with customers, they’re pretty frustrated – at least when it comes to licensing and regulations.

The Hub earned a C grade in Thumbtack’s 2015 Small Business Friendliness Survey, ranking “just below average’’ in its friendliness toward small businesses.

The survey asked 277 small Boston businesses to rate their state and city governments across a broad range of policy factors, including specific questions about the regulatory environment for labor, tax, and licensing rules, then compared states and cities against one another using over a dozen metrics.

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“Boston small businesses tell us the city is just below average in its friendliness towards small business, and could especially improve the proactive training and support they offer,’’ Thumbtack’s chief economist Jon Lieber said in a statement. “Small business owners on Thumbtack have consistently told us that they welcome support from their governments but are frequently frustrated by unnecessary bureaucratic obstacle.’’

Boston city officials said Mayor Marty Walsh has made working with small businesses one of his central focuses in office.

“Over the past few months, he’s definitely made a focus on how do we make Boston better for small businesses,’’ said Rafael Carbonell, deputy director of the city’s Office of Business Development. “There’s been a significant cut down on licensing and approval time. Time is money for small businesses and there are huge improvements going on.’’

In March 2015, the city revamped the permitting and licensing system, restructuring the call center at the Inspectional Services Department and expanding the small business referral program, which provides business development specialists to aspiring business owners.

Carbonell also said recent zoning changes make it easier for bakeries and art galleries to get started by allowing them to open across all business districts. And after the record-breaking winter that crippled some local businesses, Mayor Walsh increased funding to The Boston Main Streets Foundation (BMSF) for a range of projects, including an art and music series, streetscape beautification, and winter programming activities.

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But the city hasn’t worked out all the kinks just yet, according to one small business owner in Back Bay. Kit Hickey, co-founder at Ministry of Supply, a Boston-based fashion tech company, told Boston.com she and her partners have faced quite a few tedious bureaucratic challenges since opening their Newbury storefront in July 2014.

“Some of the regulations around signage have been really hindering,’’ Hickey said. “It can be harder for a smaller business to get their name out there.’’ Ministry of Supply also has storefronts in New York City and San Francisco, but Hickey said that in Boston it took over a month and a half for the company to get basic signage stating the name of their business on their storefront.

Other aspects of running a small business in Boston have been great, Hickey said.

“We have found it’s a really good city to hire in because of all the colleges,’’ she said. “A number of people are looking for jobs and they’re really eager. We’ve had really good experiences with employees.’’

Nearly 18,000 small business owners nationwide answered Thumbtack’s survey this year, with 463 responding from Massachusetts. Boston ranked 72 out of the 95 cities analyzed this year, with its grade slipping slightly from last year’s C+. Only states with more than 50 responses and cities with more than 30 responses were graded.

Thumbtack attributed Boston’s slip to the low scores the city received for some metrics like licensing regulations and ease of starting a business, both of which earned D+ scores. Boston fared better for ease of hiring and overall government friendliness, which earned C+ grades, and received a C- for its tax and labor regulations.

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Jobs that make the world a worse place, according to the people who hold them:

According to the survey, Manchester, New Hampshire, Dallas, and Richmond, Virginia ranked highest for small business friendliness, while New York City, Los Angeles, and Chicago were among the least friendly cities.

Worcester was the highest-ranked city in Massachusetts this year, scoring better than both Boston and Springfield.

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