Survey Gives Oregon Mixed Grade on Small Biz

Great Place to Start Small Business, But Hiring Costs High

POSTED: 4:50 AM PDT June 12, 2012    UPDATED: 7:15 AM PDT June 12, 2012 
BEND, Ore. -

A new survey from Thumbtack, a small business hiring website, shows Oregon is a great state for people to start a small business but doesn't fare so well helping to pay for new employees.

Thumbtack, a website that helps local businesses hire local people, surveyed 6,000 small business owners across the country to find out the issues most important to them.

Here in Oregon. it's the cost of hiring.

Thumbtack, a website where a network of small businesses advertise for local help, wanted to see what mattered most to small businesses.

The website, along with a foundation that promotes entrepreneurship, asked small business owners a variety of questions about the state's friendliness towards small businesses.

It asked about licensing regulations, how easy it was to start a business, as well as network and programming.

"Whether small businesses are aware of training and networking programs available in the area is a very important determinate of business friendliness," said Sander Daniels, co-founder Thumbtack.

Daniels says easy to understand and evenly regulated professionally licensed regulations generally make for a very small business-friendly environment.

"We heard a number of stories about electricians, for example, who were delayed in projects by three or four months because they were slow to get their permit to rewire residential homes," Daniels said.

Oregon earned an A- for the ease of starting a small business.

"So there was clearly information," Daniels said. "Easy to access information online about which forms to fill out, available resources at the local city halls or whatever it might be."

But once the business got up and running, hiring costs changed things.

"(That) included things like mandatory healthcare costs or disability insurance costs," Daniels said. "Filing fees that you might have to make with the city or county government when you hire somebody like that."

The survey said Oregon was the third most expensive state in the country for hiring employees, earning the state an F!

It was Oregon's lowest grade in the survey.

Oregon also received a low grade in how state local government imposes licensing, forms, requirements and fees.

"Any way that you can simplify the licensing process, and evenly apply it to all industries, is a big win for small business," Daniels said.

Oregon also was rated among the West's least optimistic states about future prospects.

The Bend Chamber of Commerce says the cost of health care is hampering a lot of new hiring locally.

"The fact that we got an F when it came to hiring, I'm not surprised," said Tim Casey, president of the Bend Chamber.

"The cost of health care is just outrageous -- that is probably the largest impediment to hiring new employees," Casey said.

Casey says the cost of health care has risen considerably since 2007, and it's not the only thing.

"Not only do you have the salary or the hourly wage for the employee, but the benefits as well," Casey said.

Casey says there are some business owners who are completely frustrated at system development fees that sometimes can be more expensive then building a new building.

"So you have (a) child care (business) or a coffee shop," Casey said. "Imagine how many cups of coffee you'd have to sell in order to make up $150,000 to $200,000 in SDC fees?"

When asked what needs to be done to get the area back to a more business-friendly environment, Casey says to look no further than this November's election.

"Citizens, when they vote, they need to pay attention whether a new incoming (city) councilor is going to be business-friendly," Casey said, "and recognize that economic growth will help us all in the community."

On the other hand, the Bend Chamber reported a significant uptick in business in the first quarter of this year, and the second quarter is looking good, too.

"Attitudes are much better than they have been for the past three or four years," Casey said.

To view the full survey, you can go to www.thumbtack.com/or.