Kentucky cracked the top 10 in a national survey measuring small business friendliness, making it the most improved state in overall rankings this year.
The commonwealth earned an A- in overall friendliness in the third annual Thumbtack.com survey, jumping from 22nd in 2013 to 9th. The study, done in partnership with the Kauffman Foundation, collects data from more than 12,000 small business owners to evaluate state and local business environments across the nation. Last year, the state earned a B- for overall friendliness.
"Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, and Kentucky has worked hard to make that a reality," said Jon Lieber, chief economist for Thumbtack.
Female entrepreneurs in Kentucky rated the friendliness of state government 14 percent higher than their male counterparts, according to the survey. Kentucky scored A+ in ease of hiring, a B+ in zoning, and B- in ease of starting a business and in employment, labor and hiring. The state's lowest grade was a D+ in ease of licensing compliance.
Louisville was rated as one of the top five cities for small business friendliness nationwide. The top-ranked states were Utah, Idaho, Texas, Virginia and Louisiana. The lowest rated were Rhode Island, Illinois, California, Connecticut and New Jersey.
"Kentucky recognizes that small businesses are the backbone of our economy," said Gov. Steve Beshear in a statement. "That's why we've focused on developing innovative programs and offering dynamic services to help these growing companies every step of the way."
Chuck Sexton, director of Paducah Economic Development, works closely with area small businesses through EntrePaducah. The national recognition is a good indicator the state makes small business success a priority, he said.
"To jump up 13 spots, it's really a great thing and a credit to the governor, the legislature and the Kentucky Cabinet for Economic Development for their leadership," Sexton said.
One way the state encourages small business growth is through the Kentucky Small Business Tax Credit.
The governor signed a bill Monday to make it easier for businesses to receive the credit and encourage growth and expansion. The available state income tax credit ranges from $3,500 to $25,000.
To receive the credit, small businesses must create and fill one or more eligible jobs for one year and invest $5,000 or more in qualifying equipment or technology.
The tax credit was among local seminar topics presented in early May in honor of Small Business Month.
The effort to raise awareness of the credit is paying dividends.
"I'm really happy one of our local businesses, System Solutions, is going to receive the full amount, $25,000, in tax credit," Sexton said. He expects another business which just submitted paperwork to also be approved.
EntrePaducah assists entrepreneurs interested in starting a new business venture, as well as existing small businesses looking to expand.
Relationships with city and county officials, and agencies like the Purchase Area Development District, Murray State University's Small Business Development Center, and West Kentucky Community & Technical College are critical, said Sexton.
"The key for us is to have partnerships," he said. "Success breeds success and there's no reason for us not to work together closely."
Contact David Zoeller, a Paducah Sun staff writer, at 270-575-8676.
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