Small Business Cities

The 5 worst cities for small-business owners


The worst cities for small-business owners

Mark Edward Atkinson/Tracey Lee | Getty Images

While small-business confidence rebounded in July from a 15-month low, there are still some U.S. cities where it is difficult for entrepreneurial businesses to grow.

Every year, Thumbtack ranks the U.S. cities that are the friendliest for small businesses. That means it also ends up ranking the worst cities in the U.S. when it comes to small-business climate.

In all, 95 U.S. cities are ranked on 11 metrics, including training and network programs, ease of hiring and overall regulations. Nearly 18,000 small businesses across the U.S. were surveyed for this year's just-released study.

Read on for the U.S. cities that have the dubious distinction of making the bottom five in the Thumbtack ranking for 2015.

—By CNBC's Sarah Whitten
Posted 19 Aug. 2015

5. Winston-Salem, North Carolina

Bonnie Jo Mount | The Washington Post | Getty Images

Some North Carolina cities are making a big push to support start-ups, including a Durham-based beverage company that got Google's attention.

But small-business owners in Winston-Salem, North Carolina, portray a worsening business climate in their hometown. In Thumbtack's 2014 ranking, Winston-Salem was ranked as a friendlier place for small businesses with favorable employment, labor and hiring regulations and strong training and networking programs.

But Winston-Salem's lot this year led it to slip into the bottom 5. It was ranked the worst location to start a business by respondents and has seen a decline in educational programs for entrepreneurs.

Top weaknesses
Ease of starting a business: No. 95
Training & networking: No. 95
Ease of hiring: No. 94

Biggest strength
Zoning regulations: No. 12

4. New Haven, Connecticut

Denis Tangney Jr. | Getty Images

Connecticut is one of the most financially challenged U.S. states, with a pension crisis that is hard to fix and increasing taxes that have led some iconic companies in the state, including GE, to threaten to move away. And it appears those troubles are also influencing small business–owner sentiment.

New Haven, Connecticut, has continued to decline since it first appeared on Thumbtack's radar in 2014. The city has struggled to provide education for entrepreneurs and is a difficult locale to start a new business.

Despite its low ranking, the city has seen an increase in ease of hiring and health and safety regulations in the last year.

Top weaknesses
Ease of starting a business: No. 93
Training & networking: No. 91
Tax-code rank: No. 91

Biggest strength
Licensing regulations: No. 25

3. Buffalo, New York

The downtown area of Buffalo, New York.
Lonely Planet | Getty Images

New York State is making every effort to bring manufacturing jobs to its older, industrial cities. From TV ads taken out by the state to tax credits, cities like Buffalo are hoping for a manufacturing renaissance, bringing in big names such as Elon Musk's SolarCity. But small-business owners don't seem to think the big-business push is helping them, at least not yet.

While this city has one of the better training and networking programs for entrepreneurs, Buffalo has faced difficulty when it comes to ease of starting a business and ease of hiring. If there's a silver lining, while the numbers are bad, respondents actually ranked the city higher on both of these metrics this year than they did last year. Buffalo is the only of the five cities on this list that was also among last year's bottom five.

Top weaknesses
Employment, labor & hiring: No. 89
Ease of hiring: No. 87
Ease of starting a business: No. 86

Biggest strength
Training & networking: No. 19

2. Albuquerque, New Mexico

Albuquerque, New Mexico.
Bob Thomason | Getty Images

Back in 2013, Albuquerque, New Mexico, had a favorable ranking on Thumbtack's friendliest cities list; however, in the past two years, it has seen a decline in health and safety laws as well as licensing regulations.

Top weaknesses
Health & safety: No. 92
Licensing regulations: No. 89
Training & networking: No. 88

Biggest strength
Environmental regulations: No. 46

1. Hartford, Connecticut

SeanPavonePhoto | iStock / 360 | Getty Images

Connecticut may be a desirable location for hedge fund manager homes, but it's clearly not the place to own a small business, with two of the five cities on this list and the bottom city of all, Hartford.

Hartford's struggles in 2015 are pretty alarming, based on responses to the survey from small-business owners. The city has the worst ranking in six of the 11 metrics of Thumbtack's survey and has steadily declined year over year.

The city is the least friendly for small businesses because it lacks favorable regulations and is a difficult location to hire new employees.

Top weaknesses
Ease of hiring: No. 95
Overall regulations: No. 95
Health & safety: No. 95
Employment, labor & hiring: No. 95
Licensing regulations: No. 95
Environmental regulations: No. 95

Biggest strength
Training & networking: No. 69

Click here for the 10 best cities in America to own a small business.