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Writer's pictureAsher Dixon

Small Businesses Stuck in ‘Hotel California’, Wanting to Relocate, But Can’t Afford the Cost

Only 13% of small businesses in California are happy with their location, which is nearly 40% lower than the national average, according to the February survey of 80,000 small business owners nationwide, a joint project of PublicSquare and RedBalloon. 

   

Nationwide, half of respondents say they are happy with their current location and don’t plan on moving. In California, 13% say they are happy in their location, and 67% are either planning a move (10%), considering a move (30%) or they are feeling trapped, wanting to move but can’t afford it (27%).  

 

“Nearly a third of small businesses feel they’re stuck in Hotel California, where they can check out anytime they like, but they can never leave,” Andrew Crapuchettes, RedBalloon CEO said. “California used to be the engine of small businesses in America, but those still California dreaming are finding it’s become a nightmare – 67% want to escape.” 



Charts 

 

We asked employers if they were considering moving their business to another state, and if so, why. Nationwide nearly half of all small business owners (47.7%) say they are happy with their current location and have no plans to move.   


But in California, only 13% are happy with their location, and 67% are either planning a move (10%), considering a move (30%) or feeling trapped, wanting to move but can’t afford it (27.1%). They can check out anytime they like, but they can never leave. 


Coast to Coast 

 

We compared the individual results for California and Florida, and also Red States and Blue States nationwide. The stark contrasts leave little doubt where small businesses thrive. 


Red States vs Blue States 



But the Weather is Nice 

 

When asked to identify which factors make them want to relocate, with the ability to choose multiple items, 64.5% of employers list high tax rates, and 59.4% blame anti-business government policies.



Again, looking just at California, the Golden State is struggling, as 86.4% say high taxes are driving them away, and 84.9% say the anti-business government is also to blame. But the weather is nice. 



Methodology: 


The Freedom Economy Index surveyed a universe of over 80,000 small business owners throughout the United States, fielding the questionnaire from February 6 to 9, 2024, with 840 respondents. The survey has a margin of error of +/-3.0% at the 95% confidence level. Download the full February FEI here 

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