Study: Sonoma County a great place to start a business

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Clothing shop owner Ru Scott wasn’t surprised that a new survey ranked Healdsburg as a good place to start a business.

“I already knew it,” said Scott. “That’s why I opened the store.”

By “the store,” she means her second Punch contemporary fashion outlet, which opened this summer on Healdsburg Avenue a block from the town plaza. Since 1999 she also has owned another Punch store on Fourth Street in downtown Santa Rosa.

Both Healdsburg and Sonoma ranked in the top 20 of a new survey of the best cities in Northern California for starting a business. The rankings, by the consumer finance website NerdWallet, placed the two towns far higher than any of the county’s other cities with populations above 10,000.

See NerdWallet study here.

While business leaders from the 177 cities in the survey may debate the findings, a handful of entrepreneurs who’ve recently brought their businesses to Healdsburg and Sonoma said they made the right move.

Each suggested that their products and services fit well in Wine Country.

For Andrea Mugnaini, who produces wood-fired ovens with Italian-made components, a key moment came when she realized that many prospective customers “are coming out here anyway for food and wine.”

A few months ago Mugnaini completed the move of Mugnaini Imports to Healdsburg from an industrial park in Watsonville. The 15,000-square-foot showroom, offices and assembly area are located on Grove Street and house 12 full-time employees. As well, Mugnaini invites residential and commercial customers to familiarize themselves with the ovens via cooking classes held at her Alexander Valley ranch.

“We are indeed much easier for the buyer to find because of the move,” she said.

The NerdWallet rankings resulted from scores for each community based on business and socioeconomic factors. The categories include the average revenue of businesses, the percent of businesses with paid employees, the median income, median annual housing costs and unemployment rate. The data came from the U.S. Census Bureau.

Emeryville ranked first in the survey of Northern California cities, followed by South San Francisco and Grass Valley.

Sonoma ranked 14th and Healdsburg 15th. Among the rest of the county, Petaluma ranked 57th; Santa Rosa, 71st; Rohnert Park, 81st; and Windsor 127th.

Elsewhere around the North Coast, Mill Valley ranked 10th; San Rafael, 20th; Larkspur, 23rd; Eureka, 35th, Novato, 43rd; Ukiah, 52nd; Tamalpais-Homestead Valley, 53rd; and Napa, 56th.

Towns with fewer than 10,000 people weren’t included in the survey.

Looking at the survey

Ben Stone, executive director of the Sonoma County Economic Development Board, conceded the survey creators may have settled on some reasonable data points, but “you could pick an entirely different set that might be just as logical” and probably would result in different findings.

He noted that Grass Valley, Healdsburg and Sonoma all have large tourism sectors, which often means more inns and other small businesses serving visitors. Perhaps, he said, these towns scored higher because they had better ratios in the category of the number of businesses per 100 people in the population.

Regardless of the survey rankings, he said, “I think there’s been a big effort around the county to become more business-friendly.”

Jonathan Todd, a NerdWallet economics writer who conducted the study, said the top-ranked communities all had strong measures of economic well-being. For example, the top 10 had a median annual income of $77,000, compared to about $50,000 for all the communities surveyed.

“It’s definitely based on the health of the local economy,” he said of the rankings.

NerdWallet has done about a half-dozen such surveys around the U.S. and typically finds the top-ranked places are suburbs on the edge of a larger metro area. Todd found it noteworthy that Grass Valley, Sonoma and Healdsburg ranked high because they are smaller towns whose economies aren’t directly tied to either San Francisco or another big city.

Todd also suggested the California economy remains strong compared to the rest of the nation. When NerdWallet this summer ranked the nation’s best cities sized between 50,000 and 100,000 people for starting a business, the Golden State had five communities among the top 25.

Great places to live

In Healdsburg and Sonoma, new business owners spoke about their towns as great places to live and to do business.

“For Sonoma County, there really isn’t a foodie center besides Healdsburg,” said Donna Tokugawa, who with her husband Nez and adult daughter Tai last winter opened The Taste of Tea on North Street.

The loose leaf specialty tea business has a tea lounge, which also offers ramen, green tea ice cream and other Asian-inspired foods. The business also features a relaxation lounge, where clients can receive an hour-long session of green tea face mask, foot soak, herbal tea neck wrap and a docent-led introduction into the differences between teas from Japan, China and Taiwan.

“Probably 80 percent of our business is local,” Tokugawa said. Residents of an agricultural area appreciate the story behind her teas.

The business employs seven and Tokugawa said she is seeking to hire more workers.

For Punch store owner Scott, the timing for her new clothing store seemed good because the nearby Shed market/cafe and other businesses are drawing more visitors north beyond the town square. She also believes the town is attracting more people with an interest in the kind of fashions she stocks.

“It’s definitely becoming a hip place to be,” she said.

Her two stores together employ 10 workers.

In Sonoma, Anne and Jeffrey McKibben are hoping this fall to open the doors on their CocoaPlanet chocolate factory and tasting room.

The couple bought a home in Sonoma in 2005 and moved there full time in 2008. About three years ago they began their business as a wholesale and online seller of fine chocolates that contain such “pearls of flavor” as salted caramel and vanilla espresso. This meant that every few months Anne McKibben needed to travel to a batch processor in Los Angeles where she prepared by hand the chocolate’s special fillings.

The couple, who have two children, wanted to produce the chocolate closer to home and began looking around the county for possible locations. They eventually settled on a former print shop on Broadway south of the town plaza. They hope to open for business there later this fall.

The wisdom of their decision was confirmed by the help they received from officials at both the city and the chamber of commerce, Anne McKibben said. The latter group alerted the couple to a $10,000 city loan, which eventually can become a grant. It has allowed the business to make such environmentally friendly improvements as LED lights and a rainwater harvest system for the outdoor garden area.

“They went out of their way to call me and offer support,” McKibben said of the chamber staff. “And I’m not even a member yet.” She quickly added, “I have the application on my desk.”

McKibben expects Sonoma’s appeal will help grow the business. But she said she also is thankful to get to live in the community.

“We love it here because it’s an old-fashioned, small town,” she said.

Reaching out in small towns

Mary M. Cervantes, business services director at the Napa-Sonoma Small Business Development Center, said new business people often find it easier in small towns to reach the right people and get answers to their questions.

“The availability of resources is a little bit more at your fingertips,” Cervantes said.

Chamber officials in the two towns say they don’t want to take for granted the appeal of their communities.

Carla Howell, executive director of the Healdsburg Chamber of Commerce & Visitors Bureau, said the town wants to build on its base of agriculture and tourism.

“We don’t want all our eggs in one basket,” Howell said. “We want to diversify.”

She pointed to student loan refinance lender Social Finance Inc., or SoFi, and to business software and consulting company Métier as enterprises that add to the town’s economic diversity.

Patricia Shults, CEO of the Sonoma Valley Chamber of Commerce, said the chamber has worked for a decade with the city of Sonoma on its economic vitality partnership program, providing services to new business people like the McKibbens.

The aim, she said, is to retain the character of a small town with roots as a farming community. The chamber wants to help new businesses, said Shults, “and still retain what’s so cool about Sonoma Valley.”

You can reach Staff Writer Robert Digitale at 521-5285 or On Twitter @rdigit

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