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Survey says Winston-Salem is small-business friendly

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From left, Mike Webb, the pressroom supervisor with Goslen Printing Company, works at the cutter while pressman Bobby Moore prepares paper for a run in the five color printer on Thursday, on Thursday, July 31, 2014 in Winston-Salem, N.C. (Andrew Dye/Journal)

WINSTON-SALEM, N.C. — Chris Parr has mined a successful niche as a multifamily apartment developer with a knack for jumpstarting stalled commercial real-estate projects, according to the Winston-Salem Journal.

Parr has completed seven apartment complexes in Forsyth County, with three more in various stages of construction in Clemmons and Kernersville. Altogether, Parr’s company has about 1,400 apartment units in its portfolio and another 1,100 on the way.

 Parr credits part of his success to a good working relationship with county inspection and city of Winston-Salem planning officials that enables him to get necessary permitting and zoning issues addressed in a timely fashion.

“I’ve had a great relationship with both groups,” Parr said. “Planning is always there to help find a solution to a potential problem. They help to make my developments better, and 99 percent of the time, I do what they recommend.

“Hopefully, the ease of doing business will help our overall economy grow, perhaps faster than Greensboro.”

Parr evidently isn’t alone among small businesses having that kind of relationship with city and county regulatory officials.

Recently, a national study of 12,632 entrepreneurs conducted ranked Winston-Salem first in the country for health and safety regulations, and second for its labor laws. The group, in partnership with the Ewing Marion Kauffman Foundation, rated 82 communities for their small-business friendliness.

Winston-Salem earned an overall B+ grade out of 11 categories, up from a C+ grade in 2013. Its grade improved in nine categories.

“While there are various business climate rankings that rate locations as good or bad for business, there are no others that draw upon considerable data from small business owners themselves,” Thumbtack said.

“Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, and Winston-Salem has figured out many elements of this formula,” said Jon Lieber, Thumbtack’s chief economist.

Winston-Salem earned A+ grades for health and safety and labor regulations, friendliness of the tax code, and the availability of training and networking programs.

However, all was not rosy in the survey for Winston-Salem. It received a D+ grade for the local climate for hiring new workers, and it ranked 77th for expansion expectations over the next 12 months.

“It is encouraging to see the improvement because we have been working diligently to improve our entrepreneurship environment,” Mayor Allen Joines said.

“Projects, such as the Flywheel networking space, will do much to help our community continue to be viewed as one that embraces entrepreneurship and rapid change.”

North Carolina earned a grade of C+ for its friendliness to small business. Thumbtack said it did not get enough small business participation to measure Greensboro.

“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, vice president of research and policy at the Kauffman Foundation.

“Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves.”

Some of the survey questions were: “In general, how would you rate your state’s support of small business owners?” “Would you discourage or encourage someone from starting a new business in your state?” and “Do you think you pay your fair share of taxes?”

Not surprising, the biggest criticism of Winston-Salem’s friendliness to small businesses focused on permitting costs and the city’s business privilege-license tax.

In Winston-Salem, businesses pay anywhere from $250 to about $11,000 for the license they need to do business, city officials said.

Some sample quotes from unidentified Winston-Salem small businesses said “setting up a business in North Carolina could be an easier task. The taxes here are too high to make business ownership an easy task in the first few years of business.”

Mark Goslen, operator of Goslen Printing Co., said he has viewed the business privilege-license tax as just a cost of doing business. He said the cost has been justified by the support his company has received from city officials.

“There have been no negative experiences,” Goslen said. “They do a good job communicating with small businesses on permitting and upcoming changes.”

That said, Goslen said he would take as a positive the new state law that eliminates the power of cities and towns to levy business privilege taxes, starting July 1, 2015.

Cities and towns would have the option to tax almost every business location, but only up to $100 annually. For Winston-Salem, losing that revenue is expected to cost the city between $2.5 million and $3 million.

Some lawmakers and municipal lobbyists caution that towns and cities could have to raise property taxes to make up for lost revenue.

Dave Marley, owner of Marley Drugs., disagrees with the survey’s findings when it comes to city permitting.

“I can tell you permitting through the county is not small business friendly,” Marley said.

“Numerous ridiculous building regulations increase start-up costs. Winston-Salem’s privilege license is based on sales revenue regardless of profit margin. So I pay over $2,000 a year when I got annexed by the city in the last round and got nothing in return.”

Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said it is a plus for the community to be favorably recognized in a survey done by the Kauffman group, which has a national reputation for assisting small businesses.

Anderson said she was particularly pleased with the A+ grade for networking programs.

“It’s difficult to assess the overall results without more specific data,” Anderson said.

“The chamber will be debuting an enhanced entrepreneurial portal later this year that should make it easier for small businesses to get the services and assistance they need.

“We are seeing positive trends in existing business expansion this year, which we believe will continue and should result in more new business start-ups and small business growth,” Anderson said.