Report: Nevada among friendliest states for small businesses

By Steve Green (contact)

Wednesday, Dec. 2, 2009 | 2:05 a.m.

Forget, for a moment, Nevada's high rates of bankruptcies, foreclosures and unemployment.

One business advocacy group, the Small Business & Entrepreneurship Council of Oakton, Va., on Tuesday issued a report arguing that Nevada still offers opportunity for entrepreneurs thanks to the state's pro-business atmosphere. Nevada ranked No. 2 in the 14th annual rankings of the states according to their public policy climates for small business and entrepreneurship.

In terms of their policy environments, the Top 10 entrepreneur-friendly states are: 1) South Dakota, 2) Nevada, 3) Texas, 4) Wyoming, 5) Washington, 6) Florida, 7) South Carolina, 8) Colorado, 9) Alabama, and 10) Virginia. The Bottom 10 include: 42) Hawaii, 43) Minnesota, 44) Massachusetts, 45) Rhode Island, 46) Maine, 47) Vermont, 48) New York, 49) California, 50) New Jersey and 51) District of Columbia.

The rankings are officially called the "Small Business Survival Index 2009: Ranking the Policy Environment for Entrepreneurship Across the Nation." The small business group says the index helps business owners, investors and lawmakers understand the "public policy burdens placed on entrepreneurship and small business in the states.''

But despite the business-friendly political climate, not everyone is positive about short-term economic opportunities in Nevada for entrepreneurs.

Las Vegas retail analyst and adviser Pamela Joy Ring is president of The Ring Retail Advisory LLC.

"Up until this economic crisis, I would agree that Nevada was a state which encouraged the prospering of small business and entrepreneurs. The story of Nevada was based on mercurial growth and as the president of the local chapter of the internationally based Turnaround Management Association, our platform was to help advise, encourage and educate our business community to avoid financial distress by growing in a fundamentally right way,'' Ring said in an e-mail Tuesday.

"However, I believe Nevada will be one of the last states to recover from this Great Recession, as we are so dependent on the discretionary consumer who is financially challenged at all income strata,'' she said.

"Retail in Nevada has suffered commensurately to what has occurred nationally and more so because, like the story of Nevada in context to the economy, so much of our income is tied to working in tourism and servicing its end user, the discretionary consumer. In a fallen house-of cards-fashion, jobs, housing and credit have muzzled our ability to spend beyond essentials,'' Ring wrote.

"That said, it is good to know that we have a political and fiscal infrastructure at the ready to support the recovery and comeback of small business and the entrepreneur,'' Ring wrote.

Small Business & Entrepreneurship Council chief economist Raymond J. Keating, author of the study, said in a statement: "Policy matters to the growth and success of small business. The 'Small Business Survival Index' gets at the public policy costs and trends that affect - directly or indirectly - entrepreneurship and small businesses. These measures should matter to everyone because small businesses, of course, drive innovation, economic growth and job creation. If we want to get our economy back on a solid, robust growth track, then we need pro-entrepreneur policies at the federal, state and local levels."

Factors in the index include taxes, regulatory costs, government spending, property rights, health care and energy costs.

And as for Nevada small businesses hoping to survive the recession, Ring offered this advice:

"The strong will survive, that is those retailers who had strong balance sheets heading into this storm, who have built-in efficiencies in managing their inventories and supplier relationships and who are aggressive in offering value propositions to their customers beyond just discounting which, in many instances, can jeopardize their brand and competitive differential," she wrote.