freakout snickers: California's good, bad points for business

California small-business owners' perceptions of their home's pluses and minuses differ from their counterparts nationwide, according to the Union Bank National Small-Business Economic Survey.

First California's good points, from a business standpoint:

1. Favorable climate, 20%

2. Proximity to companies that influence their business, 13%3. Growth opportunities, 10%4. Non 25%

By comparison, the top three advantages in other states:

Cost of living 13%
Opportunities for growth 11%
Favorable climate 10%
None 26%

Now the downside of the Golden State:

1. State's economy, 20%

2. State or local businesses taxes, 13%3. Housing costs, 11%

What did business owners criticize other states for?

Statewide economy 16%
National economy 15%
State/local taxes 14%

The survey quizzed 200 owners of California businesses with annual sales of less than $15 million and 500 owners of non-California businesses.

While 48% of respondents say the climate for their small business has worsened in the past two years, 48% expect the climate to improve in the next two years. Only 7% of California businesses plan to add jobs, compared to 11% nationally. In 2011, 24% of California owners planned to add jobs. Instead, 25% cut jobs in 2011, compared to 20% of non-California businesses.

"This survey demonstrates the strength and resolve of those at the helm of small businesses across the nation who, despite the lack of confidence in the direction of the overall economy, are confident in their own ability to chart a positive course for their business," said Union Bank Executive Vice President Todd Hollander.

A separate survey of business startups by Kauffman Foundation and LegalZoom, a website of do-it-yourself legal documents, found 81% are confident or very confident that their businesses will be more profitable in the next 12 months than they are today.

"Despite the recent downward trends in business starts and start-up hiring, these data suggest new business owners have adopted the optimistic entrepreneurial spirit as they anticipate what lies ahead for their businesses in 2012," said Robert Litan, vice president of research and policy at the Kauffman Foundation, an advocate of entrepreneurship.

LegalZoom CEO John Suh added, "Given that small businesses are the engine of job growth, it will be interesting to see how quickly this optimism translates into new hiring."

The National Federation of Independent Business conducted a comprehensive study of small businesses' access to credit. It suggests that the money is not flowing like entrepreneurs' optimism. In 2011, 57% of small businesses tried to get financing for their businesses compared to 48% in 2010. However, the number of businesses actually getting that financing was unchanged.

"More attempts resulted in more rejections rather than more small-business owners receiving credit," the report said.

Click here to read the full study, "Small Business, Credit Access, and a Lingering Recession."

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