True or false?: Marin, Napa, Mendocino, Sonoma counties rank among best in California for small business

Some small business owners say they wouldn’t want to be anywhere else, but others say their home counties could do better with small business incentives

Real-life experiences can be quite different from what’s jotted down on paper when it comes to forecasts and outlooks.

While SmartAsset Advisors recently said much of the North Bay is a great place for small-business owners, locals are divided whether that is fact or fiction.

For 2022, it ranked Marin as the best county in the state for being a small-business owner. Napa County came in sixth, Mendocino seventh and Sonoma 10th.

“I don’t put lot of credibility in it,” Mike Blakeley, CEO of Marin Economic Forum, said of the report. “You need to look at what was studied. The top ranking came as a result as the highest proportion of small-business tax filings. The number of individuals in Marin County that filed as a business is higher proportionally than any other county in California. They used that data point to suggest Marin County is the best place to have a small business.

“From our perspective, what it tells us is, yes, we have a lot of people who have businesses here and file their tax returns as a business. The study doesn’t say anything about the environment these businesses are operating in.”

SmartAsset is a wholly owned subsidiary of Financial Insight Technology, and is registered with the U.S. Securities and Exchange Commission as an investment adviser.

On its website, SmartAsset said the criteria it measured included these:

• Proportion of people in a county with small-business income.
• Reported business income.
• Amount of tax a potential resident must pay on their income.
• Five-year change of small business tax returns.
• Five-year change of small business income.

“To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income and compared that to the total tax-filing population of the region,” SmartAsset explains online. “Next, we compared the total amount of small business income to the overall amount of income reported in each region. We then measured the change in these variables over a five-year period.”

Finding truth in the report

Many business owners agree the North Bay is ideal.

Erika and Ross Dawkins have three businesses in Sonoma County and are contemplating a fourth in the North Bay.

“Sonoma County, and probably Marin and Napa, it is a bunch of small towns. Small towns are community driven,” Dawkins said. “It feels like our locals want our local businesses to survive so they are supportive, supportive by eating, drinking and shopping.”

She opened the apparel and home furnishings store Bon Ton Studio in Healdsburg in 2019 after having pop-up locations for a couple of years. Bon Ton Baby opened two years later across the town square. In December, her husband with a friend started Ami, Ami, which is high-end French wine in a box, that has pop-ups and an online presence. Headquarters are in Healdsburg.

“I think the whole county is desirable,” Dawkins said. “We have such a great business chamber as well that supports our small businesses. You see people with multiple locations.”

She says tourists are a large component of her business and wonders if she would survive without them.

When it comes to employees, she hasn’t had a problem finding them. She employs nine people, mostly on a part-time basis.

“We are an army of part-timers I like to say. We accommodate employees who are retired and moved to Healdsburg, some are full-time moms and want out of the house a few hours, some are working on their own passions and careers and Bon Ton is a supplemental career,” Dawkins explained. “We have very low turnover.”

Kiki Theodorides, who is managing partner of the boutique inn The George in Napa, only has good things to say about doing business in the city and county of Napa. She is ecstatic that it’s not cutthroat like San Francisco.

“In Napa I’ve experienced a different pace. They realize the importance of collaboration, whereas in urban areas it lacks that human element. There it’s just the spreadsheet and the bottom line. I feel it’s a different approach in Napa among everyone,” Theodorides told the Journal.

The George has nine rooms in downtown Napa. Even though it took a handful of years to get through the renovation process, Theodorides doesn’t believe the government hoops to owning and operating a small business were any different from any other location.

“If ever we needed advice or guidance or something from any other business or association, they were willing to help. That’s not something I’ve found in San Francisco,” Theodorides said.

She singled out Visit Napa Valley, and the Yountville and Napa chambers of commerce for being proactive by reaching out, providing resources and support.

Jeri Hansen, president and CEO of the Napa Chamber of Commerce, was not surprised the county ranked so high in SmartAsset’s study.

“We are a community made up primarily of small businesses. We, as a chamber and business community, do have good relationships with our city partners,” Hansen said. “We are in constant dialogue and contact with them so we can help with streamlining and removing barriers.”

She pointed to the city of Napa having a business concierge program for small businesses and the Solano Napa Small Business Development Center as entities that ease the process for becoming a small-business owner, and then helping them to survive and thrive.

Hansen’s counterpoint in San Rafael also wasn't surprised that area counties topped the chart for best places for small business.

“It just validates everything I already knew. Marin and the North Bay are great places to own and operate a small business,” said Joanne Webster, president and CEO of the San Rafael Chamber of Commerce. She is also co-chair of the Marin Council of Chambers, which includes the 11 chambers in Marin County. “It also validated that truly in Marin small businesses are the backbone of the economy. They generate taxes and money for our county to provide the services for residents.”

Not the best location

But for others, the challenges of the North Bay have them scratching their heads when it comes to the study’s outcome.

“I am surprised that Marin is considered the No. 1 place for small business in California. But looking at what was being looked at I can understand why,” Pamalah MacNeily who with husband John Granatir, owns Blue Waters Kayaking at Point Reyes Station. “I personally think the ranking of whether a city is the best place for a small business should depend on availability of housing, and workers nearby. And what kinds of incentives are given to small businesses.”

They have been in business since 1994. Granatir helped launch Tamal Saka Kayaking, the first kayak company on Tomales Bay. MacNeily came aboard in 2002, and in 2004 the couple bought Blue Waters Kayaking.

They have six full-time employees, 20 part-timers, and 25 seasonal workers.

“Marin may be No. 1, but that does not mean it is easy to do business here. There is not a strong culture of helping businesses. In fact, working in the recreation business is incredibly difficult due to the California Coastal Commission, the Marin County Planning Department, marina owners who greedily want to take all the profits for themselves, and the neighbors who don't want to see tourists come out to west Marin,” MacNeily said.

“They have their piece of paradise and they want to keep it to themselves. Doing business in west Marin is not like anywhere else. It is difficult to find a place to rent. Employees are often scarce. It is an hour to come here from San Rafael, so people don't want to travel that far when they can find work down the street.”

Derek Webb, who owns two lodging properties in the North Bay, is just as passionate as MacNeily and just as perplexed about the ranking.

He owns Spring Ranch in Mendocino and Triple S Ranch Napa. The latter is actually located in unincorporated Sonoma County, but has a Calistoga address.

“I don’t think any of these counties are great for business or that California is a great place for business. Period,” Webb told the Journal. “I feel like I’m always one step from being put out of business. There are so many rules and regulations and liabilities. Government doesn’t help you in California. It is there to destroy you. The big train wreck is this insurance thing.”

He was referencing the recent notification by Allstate and State Farm Insurance companies that they will no longer write new policies in the state. Farmers Insurance also just announced it will cap the number of new policies it will write this year.

Fees from Airbnb, local taxes and state taxes are so cumbersome, Webb wonders if people will want to keep traveling to California because lodging is becoming cost prohibitive. He worries the state will pass a bill like what was introduced this session (state Senate Bill 584) that would add a 15% tax to short-term rentals, with the idea that revenue would help with the housing shortage.

James Benjamin would love to leave the state because of all the regulations. But for now he will continue running Shaw Plumbing in Calistoga.

The company has been in Napa County for 60 years. Benjamin has worked there 22 years, became a manager five years ago, and been its owner for a year. He has six plumbers and two office employees.

“If I could pick everything up and relocate, including my employees, I would be out of California,” Benjamin said. “California is really strict.”

Robert Raney, one of the owners of Sonoma Springs Brewing Co. in the town of Sonoma, has mixed feelings.

“I think overall it’s an amendable county to do business in. Overall we have good relationships with the city and county of Sonoma. Business-wise I don’t know if there are any extraordinary hurdles we have to face compared to other counties,” Raney said.

Still, not one of the brewery’s 11 employees could find housing in the town of Sonoma. One commutes from Concord, while the rest are scattered throughout the county.

Raney’s biggest complaint, though, is the lack of improvements being made to Highway 37 between Sears Point and Vallejo.

“There is no concrete plan to address it. It’s bad for deliveries because we deliver our own product. It is a known problem and there is no push toward a solution.”