A number of recent studies have declared that California is a bad place for business, innovation and entrepreneurship, but few of them address exactly why that is. While a complete diagnosis would likely require a roundtable discussion between historians, economists, sociologists and business executives, it may be worthwhile to address a few basic concerns.
The main problem, most experts assert, is bloated government. They argue that excessive regulations, tax structures and entrepreneurial hurdles serve to limit businesses' profit margins while contributing little towards such laws' original social or economic purpose.
"I think taxes, regulations, access to capital and the feeling of a hostile business climate all contributed," Small Business California President Scott Hague told the Orange County Register, referring to a recent study that found 21 percent of small business owners don't expect to be operating in California three years from now.
Regarding his own business, Gary Sutton, co-founder of Teledesic, cited a specific incident that prompted him to move his business elsewhere.
"Toward the end of 2008, our Sacramento geniuses decided to 'temporarily' suspend all net operating loss carry-forwards," Sutton wrote in Forbes magazine. "They did this retroactively, to the beginning of the year, and 2009 sales growth slowed to 10 percent, putting the brakes on new hires. Burial services were held for a few interesting new products."
Tags : ca, incorporation news, operations, small business management
Posted: May 27th, 2011