American business news is good. Economic development is sound and in many places, the regional economy is on the uptick. But the business news is not universally positive for every county or city. If you’re starting a business or relocating your business, what should you look for to know if an area is a good place for startups, has plenty of educated and skilled workers, and is a positive place for business?

The Limitations of Rankings

Rankings are common, but this type of business news can be confusing and unhelpful. For example, in the same year the city of San Jose ranked #1 in one survey of best cities for small businesses. At the same time and in the same year, it ranked 121st as a good city in which to start a business. Rankings are frequently impersonal and compiled by people with plenty of business sense, but with very little experience in any particular county or city.

The Positives of Surveys

In contrast to impersonal rankings, surveys of local businesses and communities can be a great way of understanding the climate. These surveys typically reveal that most business owners value the same sorts of things, including an educated workforce, low rates of employee turnover, clear licensing systems, clear and simple tax systems, and a regulatory environment that makes compliance easy.

What Businesses Need

Whatever the business, certain things are crucial for a local economy to thrive. Business news frequently focuses on larger companies, but most economies are dependent on small businesses and midsize companies. There are certain things that these smaller enterprises need in order to thrive:

• Community support Every entrepreneur needs to feel that the community is interested in their success. This is something that leaders may need to initiate, but it’s also crucial that the community itself step in and show interest in helping local businesses thrive.
• Friendly regulations Regulations are necessary to keep everyone safe and keep things moving in the economy in an orderly fashion. But nothing kills a business faster than codes and regulations that are overbearing, confusing, contradictory, or just feel like they’ve been put there solely to be just one more hoop you’re forced to jump through. A friendly regulatory environment is one where regulations are clear and compliance is easy to achieve.
• Good employee pool In order for a business to succeed, the local community needs to be able to offer good employers a competent pool of talent. This means that the community itself needs to have good schools, safe neighborhoods to live in, a variety of churches and other houses of worship, and a relatively vibrant downtown or nightlife scene so that talented individuals are drawn to the area and believe it’s possible to enjoy a good quality of life there.
• Safety and cleanliness High crime rates are bad for business. Customers simply won’t show up if you’re located in an unsafe area. It’s also crucial that you have a clean and inviting environment that makes people want to come to and spend time in a space. This is something it’s important to look for as you read business news and consider a local environment as a possibility for startups.
• Capital and training For a local economy to really be business friendly, there also needs to be regular access to useful leadership training for entrepreneurs and enough bank loans and grants to go around to invest in the local future. It’s important that a community be invested in providing mentoring, training, and capital to businesses and startups if it’s really to be considered friendly to new business.
• Committment to local One more thing to look for in a community is a strong commitment to promoting local businesses. While it’s not a terrible idea to try to bring in some bigger businesses, it’s the mom-and-pop shops and new ventures that are the backbone of most smaller counties and their economies. Encouraging these businesses should be a priority for local government and this is a good sign that a community is open for business and ready to welcome everyone.

Communities want to thrive, but they are integral to that process. It’s important that they create an environment that’s friendly to business so that everyone can prosper.