In a recent nationwide study, Illinois ranked as the second-worst state for small business friendliness.
The study, conducted by Thumbtack.com in partnership with the Ewing Marion Kauffman Foundation, evaluated more than 12,000 businesses across the country.
The survey evaluated states based on 11 categories and gave an overall grade for state friendliness. Illinois received a final grade of “F”, with no grades higher than “C” in any individual category.
The survey found small business owners in the state were doubtful about the country’s economy. Owners were asked questions such as, “Do you think you pay your fair share of taxes?” and “In general, how would you rate your state’s support of small business owners?”
Tax codes received an “F” grade. The survey examined the rates at which states are charged for various taxes and how easy it is for owners to file and maintain tax information.
Steve Pain, owner of Quatro’s, said there are financial aspects to consider in comparison to other states, such as having a higher set minimum wage than other areas, high unemployment rates and high tax rates.
“A lot of state policies are driven by Chicago,” Pain said. “Minimum wage is not set on productivity, it’s just mandated. … Folks from Cape Girardeau want to work in Illinois because the minimum wage here is higher.”
Nicholas Stewart, one of four owners of Cristaudo’s Café and Bakery, said his company faces specific challenges because larger corporations are able to mass-produce baked goods.
“It costs a lot more to make what [large corporations] sell,” he said. “The people we hire here are trained specifically, because being a baker is a dying business, it’s a dying trade. We have to do anything under the sun and adapt to the different market fluctuations and changes.”
Stewart said unlike a large corporation, a locally owned business does not have the ability to handle large financial losses.
“When the economy is bad and our sales go down, we can’t – like a chain restaurant – spread our loss out,” he said. “We pay a lot of taxes. We have gotten a lot of perks from the city and state, like low-interest loans and things like that, but it’s still tough.”
Employment, labor and hiring was also evaluated as a part of the survey, receiving a “D” grade. Within the category, the ease and financial capability to maintain a staff large enough to be conducive to work was evaluated.
Stewart said managing a small business requires employees to do several different positions.
“It takes as much work catering for a big group as making sure your taxes, finances, unemployment and all those sorts of things are in a row,” he said. “It’s not the friendliest state in that regard. We can’t hire someone to do the books. We have to. We wear many hats.”
Branda Mitchell can be reached at firstname.lastname@example.org