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South Carolina: Opportunity Abound for Entrepreneurs

Share current LOB: SmallBusiness

South Carolina has become a safe haven for entrepreneurs. The Palmetto State has expanded beyond its trademark textile market into other sectors, due in large part to cost-effective labor and minimal regulations.

In this Q&A, Frank Knapp, president and CEO of the Columbia-based South Carolina Small Business Chamber of Commerce, talks about how companies are capitalizing on this business-friendly environment.

Q: Would you call South Carolina a small business-friendly state?

A: I would. South Carolina was ranked second in 2012 in Area Development Online’s Top States for Doing Business survey. If you want to start a business, you have a good shot at being successful here because the cost of conducting business, labor, transportation and marketing are all less expensive. Owning land is also a lot less expensive than in a larger, more populous state.

Q: How does the state support small businesses?

A: Starting in 2005, the Small Business Chamber of Commerce has been working with the state government to reduce income tax on small business from 7 percent down to 3 percent by 2015.

Each percent dropped is equivalent to $65 million, so it’s something that has helped make [small businesses] more profitable.

We’ve also worked with the state to limit expenses such as the cost of worker’s compensation and unemployment insurance. For the most part, we don’t have many regulations. The state likes to promote entrepreneurship, so they have some other programs like the South Carolina Small Business Development Centers that provide free consultations to entrepreneurs and small businesses.

Q: What are the top concerns for South Carolina small business owners?

A: We’re a relatively poor state when it comes to personal income, so access to capital is something small businesses are struggling with. That’s led to some entrepreneurs starting microbusinesses out of their homes, to keep costs down.

There is also some concern that certain incentives used by the government to entice big businesses to come here are maybe not necessary. There is a feeling that more emphasis and resources should be devoted to growing small businesses as opposed to recruiting big business. But those are all very typical of any situation where there is a finite amount of resources. 

Q: What are the main industries in South Carolina, and what role does small business play in these sectors?

A: Tourism is the largest industry, and small businesses play a huge role there. You go anywhere on the coast, everything is owned by a small businessperson with the exception of some bigger hotels. And even the national chain hotels are franchised to small business owners. Another big one is the manufacturing of different products ranging from textiles to auto parts. Most of these manufacturers are small, with 100 employees or less.

Q: How does the state’s geographic makeup affect these sectors?

A: For manufacturing, we are fortunate to have the Port of Charleston, one of the largest international ports on the East Coast, which helps us with exporting. We have a good interstate highway system, so getting things to and from the port is relatively easy. The state also runs programs to teach businesses how to export their products, if they’re interested in that. With regard to tourism, the state provides nice beaches, of course. The state government also does a lot of marketing to promote local tourism.

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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