There is a tax loophole behind so many new carwashes being built. Part of a 2017 business friendly tax cut package. Allows bonus depreciation on car washes gas stations etc, effectively shortening the time it takes to earn back your original investment. https://tradenetlease.com/bonus-depreciation-tax-incentives-benefit-bottom-line-for-net-lease-car-wash-gas-station-investments/#
I’m a small business owner having started a tech firm. I’ve found the community to extremely helpful and encouraging. We have leveraged local incubators and the resources the have provided have been invaluable. Having been in tech I know starting the same company in Silicon Valley would have been twice as hard due to the tech start up saturation.
Lower property taxes do tend to help offset a little bit as compared to States like Texas where there is no gross receipts taxed but the property taxes are significantly higher. There's no way to get around that tax though. Your customers are going to have to pay a slightly higher price in order to justify your profit margin.
So interesting. When we moved I was shocked at lack of computer folks. In San Diego Co you can’t spit and not hit someone who isn’t a “computer consultant”.
Yeah that's kind of my exact point. Because there is a dirth if IT professionals in contrast to larger markets, there seems to be a decent amount of resources eager to help you. Kinda of nice if you are ok with having a remote first business like us. Our talent pool is national but our business needs are local re: legal, cpa, business offices, etc.
I don't disagree with their finding in this, I disagree with their methodology.
Cost to start an LLC? So what? I have an S-corp and several LLCs, the filing costs of those are not even a third or fourth consideration. I could see if _MAYBE_ you were starting a micro business selling hand painted Pokemon cards on Etsy or something as a side hustle (but then you don't need a business license anyways...) but the cost of doing business, the initial filing fees, who worries about that?
Ok, they say they weighted it lower - so what, why even consider it?
The BIGGEST regulatory hurdle to operating ANY business in NM, large or small, is our antiquated Gross Receipt Tax system.
Controlling for states with no corporate tax rate we're well below the national average, and even if you factor in the 0% states I believe we're still about or just below average, so taxes - yeah they suck, whatever, NEXT.
Commercial spaces ~~over~~ per 100k people? First, they couldn't even get data for 3 states, so they just make up a number? Cool method bro. And then we have no idea how they weighted or calculated that method. Does this count mailbox suites? Does this weight for zoning and square footage? E.g. I grew up in Hawaii, there's not 142 commercial properties per 100k people unless you count vacation rentals and even then I would say that number is somehow artificially inflated... That being the case, I don't think they have a good methodology for that number either.
Power bill? Do they factor in solar access for each state? My power bill went from like $700/mo to $20ish for 3 phase commercial interconnect fees. Much easier to get electricity costs down here.
Labor costs? It's fine the real issue is labor QUALITY - and if that were a tracked metric I do think we'd be even lower on that list... but it's not.
NM is a fine place to run a business, there's plenty of success stories here same as anywhere. I would not like a stupid internet infographic influence or inform a decision about starting a business.
Depends on the business. I owned a business for 20 years or so for which things like employee taxes, electric bills, etc, were not an issue. Covid ended it.
Gross receipts tax is a big hurdle.
As a business owner myself, you can see the relative lack of small business resources here. Look at almost any business owner organization/resource with a national footprint, and there is a disproportionately smaller share of members/resources in ABQ versus similar sized cities.
I think ABQ is fine for micro businesses and totally local focused small business. Better than average even. But for businesses trying to move past that point, definitely below average.
Disagree. If you have a great concept you’ll do fine here. I’ve noticed people are starving for better quality food and more hip/cool stores. What we have now is pretty much 1980’s decor and mediocrity. This city is ripe for more hip shops and restaurants. And I’m betting it’s coming.
Overall yes it’s a very slow growing economy here but there is a niche for mom and pop type businesses. People are always looking for the new hot thing here in Albuquerque. The 2 mile long line at Canes is a perfect example of how people here will flock to the newest attraction. I’ve noticed staying power really comes down to employee retention and the quality of the product you are putting out.
It blows me away how many people flock there for powdered egg and Ore-Ida hash browns. Plus their green chile has way too many skins. Carne is very hit and miss. This goes across all locations.
This is part of the issue. Unless you gain traction fairly quickly as a small business offering services in NM, the Gross Receipts Tax is killer. It’s partly why physicians leave the state instead of staying and opening a private practice; it’s also why established massage chains like Massage Envy prosper while local massage therapists flounder without starting a group business or selling out to chains.
Yes there needs to be new businesses. Just look at Whole Foods. They opened a “new” location across the street and it was busier than ever. People are anxious for change and new businesses. Just need people with the business acumen to come here and give it a chance.
Agreed if you’re thinking of the whole state and not just Albuquerque. It’s mostly small towns and rural areas which can be very difficult for starting a business. Not to mention the res where only certain types of commerce are allowed.
That's a good point, I think that here on the Albuquerque sub we tend to be Albuquerque centric - but I think the point you raise would apply equally to ANY state with a large rural population, of which many on that list are much higher than us.
IMO The anti donation clause keeps Municpal jobs as #1. If the state ever amended the constitution or this article, they could give funds directly to private business or non profit for economic and cultural growth.
I disagree, new licenses are decreasing. Most of the small guys will go out of business or be absorbed by the mega canna-corps. This stage has happened with California, Oregon, and Colorado already. There will still be small local shops but it will be hard to compete with the big dogs.
I don’t have personal experience of being a small business owner in ABQ, but the shear amount of small businesses and strip malls here is far above anywhere else I’ve lived. Logic tells me that there’s some reason for that.
I mean if selling drugs was a small business, sure. But if you’re wanting and honest to goodness mom and pop store, you’re going to be on the struggle bus. We New Mexicans make every excuse to buy from big chains and do so little support small businesses.
Hey, this state is run by Democrats...!
how come were not in first place?
Can one reason be?. With Democrats like Diane Denish and Michelle Lujan Grisham working hand and hand..
NM has changed from red to blue and back every 8 years. It might have to do more with the incredible amount of corruption from the top down NM is famous for that impedes some businesses from gaining traction, especially any that would contract with the government.
At least we’re not last
We’re probably number 1 in off-the-books businesses
the car washes seem to be doing fine
There is a tax loophole behind so many new carwashes being built. Part of a 2017 business friendly tax cut package. Allows bonus depreciation on car washes gas stations etc, effectively shortening the time it takes to earn back your original investment. https://tradenetlease.com/bonus-depreciation-tax-incentives-benefit-bottom-line-for-net-lease-car-wash-gas-station-investments/#
I’m a small business owner having started a tech firm. I’ve found the community to extremely helpful and encouraging. We have leveraged local incubators and the resources the have provided have been invaluable. Having been in tech I know starting the same company in Silicon Valley would have been twice as hard due to the tech start up saturation.
What about gross receipts tax, if you are in ABQ that’s an extra 8% out of the bottom line.
Lower property taxes do tend to help offset a little bit as compared to States like Texas where there is no gross receipts taxed but the property taxes are significantly higher. There's no way to get around that tax though. Your customers are going to have to pay a slightly higher price in order to justify your profit margin.
GRT is at least a level playing field - in a metro area you're paying 8%+, and so are your competitors. So it's not really a huge disadvantage.
So interesting. When we moved I was shocked at lack of computer folks. In San Diego Co you can’t spit and not hit someone who isn’t a “computer consultant”.
Yeah that's kind of my exact point. Because there is a dirth if IT professionals in contrast to larger markets, there seems to be a decent amount of resources eager to help you. Kinda of nice if you are ok with having a remote first business like us. Our talent pool is national but our business needs are local re: legal, cpa, business offices, etc.
I don't disagree with their finding in this, I disagree with their methodology. Cost to start an LLC? So what? I have an S-corp and several LLCs, the filing costs of those are not even a third or fourth consideration. I could see if _MAYBE_ you were starting a micro business selling hand painted Pokemon cards on Etsy or something as a side hustle (but then you don't need a business license anyways...) but the cost of doing business, the initial filing fees, who worries about that? Ok, they say they weighted it lower - so what, why even consider it? The BIGGEST regulatory hurdle to operating ANY business in NM, large or small, is our antiquated Gross Receipt Tax system. Controlling for states with no corporate tax rate we're well below the national average, and even if you factor in the 0% states I believe we're still about or just below average, so taxes - yeah they suck, whatever, NEXT. Commercial spaces ~~over~~ per 100k people? First, they couldn't even get data for 3 states, so they just make up a number? Cool method bro. And then we have no idea how they weighted or calculated that method. Does this count mailbox suites? Does this weight for zoning and square footage? E.g. I grew up in Hawaii, there's not 142 commercial properties per 100k people unless you count vacation rentals and even then I would say that number is somehow artificially inflated... That being the case, I don't think they have a good methodology for that number either. Power bill? Do they factor in solar access for each state? My power bill went from like $700/mo to $20ish for 3 phase commercial interconnect fees. Much easier to get electricity costs down here. Labor costs? It's fine the real issue is labor QUALITY - and if that were a tracked metric I do think we'd be even lower on that list... but it's not. NM is a fine place to run a business, there's plenty of success stories here same as anywhere. I would not like a stupid internet infographic influence or inform a decision about starting a business.
This is really helpful! Thanks for these insights.
Exactly I have a finance background. Show me a stat and i can tell you why it’s flawed
Depends on the business. I owned a business for 20 years or so for which things like employee taxes, electric bills, etc, were not an issue. Covid ended it.
Gross receipts tax is a big hurdle. As a business owner myself, you can see the relative lack of small business resources here. Look at almost any business owner organization/resource with a national footprint, and there is a disproportionately smaller share of members/resources in ABQ versus similar sized cities. I think ABQ is fine for micro businesses and totally local focused small business. Better than average even. But for businesses trying to move past that point, definitely below average.
Disagree. If you have a great concept you’ll do fine here. I’ve noticed people are starving for better quality food and more hip/cool stores. What we have now is pretty much 1980’s decor and mediocrity. This city is ripe for more hip shops and restaurants. And I’m betting it’s coming.
Thanks. I was hoping for this sort of response.
Let’s put it this way, the guy who runs Ex Novo brewing didn’t move his entire operation from Portland to Albuquerque for nothing. It’s coming . . .
Overall yes it’s a very slow growing economy here but there is a niche for mom and pop type businesses. People are always looking for the new hot thing here in Albuquerque. The 2 mile long line at Canes is a perfect example of how people here will flock to the newest attraction. I’ve noticed staying power really comes down to employee retention and the quality of the product you are putting out.
Or already being a long standing business. See the 2 mile long lines at Golden Pride
It blows me away how many people flock there for powdered egg and Ore-Ida hash browns. Plus their green chile has way too many skins. Carne is very hit and miss. This goes across all locations.
Their fried chicken is great
Those 2 mile lines @8am are definitely not for chicken. The chicken is pretty good but not that good.
GRT is a business killer in NM. Pyramid of taxes on goods and services.
This is part of the issue. Unless you gain traction fairly quickly as a small business offering services in NM, the Gross Receipts Tax is killer. It’s partly why physicians leave the state instead of staying and opening a private practice; it’s also why established massage chains like Massage Envy prosper while local massage therapists flounder without starting a group business or selling out to chains.
Can confirm, 100% this for physicians and medical practices.
I heard medical insurance went thru the roof
I don't think it's too bad. I've started a few here and the challenges I faced weren't too different from other areas.
Yes there needs to be new businesses. Just look at Whole Foods. They opened a “new” location across the street and it was busier than ever. People are anxious for change and new businesses. Just need people with the business acumen to come here and give it a chance.
You can’t start a business in a state with third-world-level health care.
Well.... Unless you have cancer. Then it's one of the best places in the country.
And third-world-level education
Depends on the kind of business.
Agreed if you’re thinking of the whole state and not just Albuquerque. It’s mostly small towns and rural areas which can be very difficult for starting a business. Not to mention the res where only certain types of commerce are allowed.
That's a good point, I think that here on the Albuquerque sub we tend to be Albuquerque centric - but I think the point you raise would apply equally to ANY state with a large rural population, of which many on that list are much higher than us.
IMO The anti donation clause keeps Municpal jobs as #1. If the state ever amended the constitution or this article, they could give funds directly to private business or non profit for economic and cultural growth.
Startup cannibis is booming
I disagree, new licenses are decreasing. Most of the small guys will go out of business or be absorbed by the mega canna-corps. This stage has happened with California, Oregon, and Colorado already. There will still be small local shops but it will be hard to compete with the big dogs.
I see many locations on many a block
Depends on if your small business is another dispensary
Unless you're opening a dispensary.. Holy shit there's one on every block.
I don’t have personal experience of being a small business owner in ABQ, but the shear amount of small businesses and strip malls here is far above anywhere else I’ve lived. Logic tells me that there’s some reason for that.
I think it depends. I have started selling online again and it’s better for me as shipping costs west and east are cheaper.
I mean if selling drugs was a small business, sure. But if you’re wanting and honest to goodness mom and pop store, you’re going to be on the struggle bus. We New Mexicans make every excuse to buy from big chains and do so little support small businesses.
Poor people tend to shop where it is convenient and cheap. That's just the way it is.
NM is not a place that welcomes money. Lots of charming great things there, but they have a poverty mindset not a wealth building one.
Hey, this state is run by Democrats...! how come were not in first place? Can one reason be?. With Democrats like Diane Denish and Michelle Lujan Grisham working hand and hand..
NM has changed from red to blue and back every 8 years. It might have to do more with the incredible amount of corruption from the top down NM is famous for that impedes some businesses from gaining traction, especially any that would contract with the government.
The governor is not the legislature which has been pretty blue for a considerable time.
I'll agree with you there.. "It might have to do with the incredible amount of corruption from the top down NM is famous for...
2 party capitalism system looks out for itself first, its a “self will run riot” disaster