Sonoma is No. 14 on NerdWallet’s business-friendly list

No trustworthy map will show the city of Sonoma as situated between Emeryville, in Alameda County, and San Rafael, in Marin. But in a recent report on the best places to start a business in Northern California, that's exactly where Sonoma stands, ranking 14th on the list, with Emeryville taking the top spot and San Rafael coming in a respectable 20th.

The report was published last week by NerdWallet, a strangely-named but increasingly influential San Francisco-based financial-information service and website, known for its creation of lists such as the Best Places to Find Tech Jobs or Best Paying Cities for Women. NerdWallet might not have the reputation of, say, Forbes magazine when it comes to such business-world pronouncements, but Forbes, for what it's worth, frequently does publish stories on whatever lists NerdWallet has most recently published.

In the report on the Best Places to Start a Business, NerdWallet analyst Jon Todd says he 'crunched the data.'

'We looked at 177 cities in Northern California,' says Todd, 'excluding any places with less than 10,000 population, and fewer than 500 businesses.'

Using Census Bureau information, along with data from the 2013 American Community Survey and numbers from a 2007 Survey of Business Owners, Todd developed metrics to determine which places appeared to be the best for starting a business.

'The data essentially fell into two buckets,' says Todd. 'The first one was 'business environment,' that's through metrics like revenue per business within each city, the number of companies vs. sole proprietorships within each city, and also the number of businesses per 100 people.'

The second 'bucket,' he says, was 'local economy,' which was determined through metrics like annual income, housing costs and unemployment rate.'

The study – covering every business from one-person tax attorneys and one-person landscaping companies, all the way up to the largest corporations operating within the city – focuses primarily on the strength of the local economy, and the number of businesses per capita. It does not reflect factors related to the actual experience of local entrepreneurs navigating the sometimes-choppy waters of permitting, signage, and other regulatory matters that can make starting a new business less breezy than new business owners would prefer.

'We did not measure any sort of regulatory factors related to starting a business,' Todd admits, 'but I think that information does come through in the metric of business per 100 people. If there are a higher number of businesses relative to the population, that would suggest, perhaps, that it is easier to start a business in that place.'

Sonoma did score very well in that regard.

'Sonoma had one of the highest marks in the state,' says Todd. '9.26 businesses per 100 people. Those are the second-highest marks in the top 20. That suggests that Sonoma is a very healthy local economy, a city that has created its own business environment, a place where business opportunities exist.

'So I think Sonoma should be very proud of where they scored,' he adds. 'Fourteenth out of 177 cities is not bad at all.'

Laurie Decker, the Sonoma Valley Chamber of Commerce's Economic Vitality Partnership program manager says she had not heard of NerdWallet until she received an email last week notifying the Chamber of the new report.

'It's a nice recognition,' says Decker. 'Locally owned businesses are the heart and soul of the Valley economy. It's always been a community that supports entrepreneurship, so it's great to be recognized for that.'

Decker, in her role as support for new businesses, works one-on-one with a lot of new local startups. Last year alone she met with 83 different new businesses, helping them to connect to vital resources and information, and walk them through the process.

She says the NerdWallet study aligns with recent findings the Chamber has collected. Decker says the Chamber of Commerce does an annual survey of all the businesses in the Valley, and one of the things the study asks is for businesses to rate Sonoma Valley as a place to do business.

'Last year,' Decker says, 'we got 70 percent of respondents rating the area as four or five on a scale of one-to-five. That's really positive, and it definitely reflects that Sonoma is a great place to do business.'

As for the actual experience of starting a business in the Valley, Decker agrees that the permitting process for a new business can be somewhat challenging.

'To some extent, it is what it is, especially where state building codes go,' she says. 'It's often a longer process than people expect. But I think the city and the Chamber have really worked actively for a long time to make the process as smooth as possible, and to make this a climate that is really welcoming to a new business.'

Joe and Ramie Hencmann recently experienced what it's like to open a business in Sonoma, having just launched Sweet Scoops, an ice-cream shop on the east side of the Plaza. The couple relocated from Boulder, Colorado, after purchasing the former Grandma Linda's Ice Cream, which they discovered online while searching for ice cream shops that were up for sale.

'The word on the street is that the regulatory environment here can be challenging,' allows Ramie Hencmann. 'And it's true! There are a lot of rules, especially for a business on the Plaza.'

That said, Hencmann says that with Sonoma being such a small town, it was far easier to actually talk to the people in charge of regulatory matters.

'If I had a question, I could just walk over to City Hall and talk to the planning department,' she says. 'In Boulder, that would have been a lot more complicated.'

Ultimately, now that the new business is up and running, Hencmann says the experience, though lengthy, was positive.

'Yes, there are a lot of rules in Sonoma,' she says, 'but because the city does want and need small business, there is a lot of willingness to provide the information new businesses need.'

To see the full list of best places to start a business in Northern California, check out: www.nerdwallet.com/blog/small-business/best-places-start-business-northern-california/