Phoenix earns grade of B for friendliness towards small business

Phoenix Small Business Friendlyness, in partnership with the Ewing Marion Kauffman Foundation, today released new data showing that Phoenix earns a solid B average when it comes to its friendliness towards small businesses.  

More than 12,000 entrepreneurs nationwide participated in this year’s survey. The Small Business Friendliness Survey is the largest survey of its kind and is the only survey to obtain data from an extensive, nationwide sample of small business owners themselves to determine the most business-friendly locations.

While there are various "business climate rankings" that rate locations as good or bad for business, there are no others that draw upon considerable data from small business owners themselves. This year our team was able to rate 82 cities and most states across multiple metrics that business owners say are critical to a friendly business environment.

“After a two-month survey of thousands of small business owners nationwide, Phoenix has earned solid B grades across the board, suggesting it is doing well but there are some areas for improvement,” said Jon Lieber, Chief Economist of “Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, and by asking small businesses directly we can better understand how to create that environment.”

Some of the key findings for Phoenix - and Arizona generally - include:

  • Phoenix earned a B, B+, or B- grade in 10 of the 11 rated categories.

  • Phoenix did best in its zoning regulations, rating as the 15th best city out of 82 cities rated on that metric.

  • Phoenix had one of the lowest numbers of small businesses who said they were prepared for implementation of the Affordable Care Act, rating 73rd in the nation for preparation.

  • 60 percent of Phoenix small businesses said they paid "the right share of taxes".

  • Male business owners in Phoenix rated their outlook on the local economy 7 percent higher than female business owners.

  • The top rated cities overall were Colorado Springs, Boise, Houston, Austin, and Louisville. The lowest rated were Sacramento, Providence, Buffalo, Bridgeport, and San Diego.

“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves.”

The full survey results can be seen here and include full sets of rankings for cities and states going back three years, along with dozens of easily searchable quotes from Phoenix small businesses.

Survey methodology surveyed 12,632 small businesses across the United States. The survey asked questions about the friendliness of states towards small business and about small business finances, such as:

  • "In general, how would you rate your state's support of small business owners?"

  • "Would you discourage or encourage someone from starting a new business in your state?" and

  • "Do you think you pay your fair share of taxes?" and the Kauffman Foundation evaluated states and cities against one another along multiple metrics.  The full methodology paper can be found here.