SACRAMENTO (CBS13) — A new study has ranked Sacramento as one of the worst metropolitan areas for small businesses, and struggling business owners say a sagging economy and a heavy burden of paperwork isn’t helping.
Zanzabar Trading Company owner Scott Farrell said he hasn’t even been breaking even over the past few months, and he is not alone.
“We thought our sales were going to be higher than they were, but then the economy took a dive,” he said. “We see ourselves down 80 to 90 percent.”
Olivia Coelho is reinventing her vintage clothing store, Bows and Arrows, by moving a few streets away to lower rental costs, adding an art gallery and a beer and wine bar, hoping it will help bring in more revenue and keep her business alive.
According to the Business Journal, Sacramento recently ranked 96th out of 100 cities in a study on small business vitality, coming in just behind Stockton and Bakersfield when comparing economic growth and the number of small businesses. Modesto came in dead last.
In the past five years, Sacramento has lost nearly 15 percent of all its private sector jobs.
“California is a very complicated place,” said Rob Kerth of the Midtown Business Association. “The rules are pretty unforgiving. If you mess up a little bit it can be quite expensive.”
Kerth said regulations and taxes are two of the biggest factors crippling small businesses.
Trey Luzzi, who opened Trey B Cakes just six weeks ago, said he’s dealing with “one struggle after another” and that getting customers for his new business is the least of his worries.
“I thinking starting a small business is such a struggle. I think people get a quarter of the way through, see how much money its going to cost them, see the taxes they have to pay,” he said.
The top ranked city was Austin, Texas.