As highlighted in Kauffman Foundation’s ‘America’s New Business Plan’, too often, the regulatory requirements of starting a business are unclear for entrepreneurs. Conflicting and unclear information from various local regulatory bodies can lead to Byzantine processes, significant up-front fees, and lengthy delays; all of which harm entrepreneurs’ chances of success.
A recent report by the Institute for Justice highlights the challenges faced by entrepreneurs in 20 US cities. The report analyzes the extent, steps, costs, and user experience of licensing in each city. It also analyzes specific regulations for five common business types to understand the direct impact of the rules on entrepreneurs.
The results are striking. Starting a restaurant requires entrepreneurs to pay an average of 13 different fees for permits and licenses totalling more than $5,300. Aspiring barbers must complete an average of 55 steps with eight difference government agencies involved. The report highlights issues common across most the featured cities - the lack of formal guidance of what permits are needed, the at-times arbitrary rules on how, when and where to apply for permits, and the general lack of one-stop online shops to submit and track applications.
In publishing this detailed report, the Institute for Justice joins the Kauffman Foundation, Right to Start, Global Entrepreneurship Network, UNCTAD and many other organizations that, collectively, are calling on governments to make it cheaper, faster and simpler to launch a business.
One city leader who has embraced this message is Mayor Suarez of Miami.
Identifying Miami as number one in the U.S. for job creation, startups, and small business growth, Mayor Saurez has described his role as “ensuring the government provides a wealth of resources and does not become an obstacle to our entrepreneurs and growing businesses”.
His first venture into simplifying business regulation came with the launch of the City’s Electronic Plan Review (ePlan) in 2018. This allows residents, contractors and developers to submit plans and permits online.
More recently, Mayor Suarez launched eStart - a one-stop online shop that allows people to apply for business licenses and permits from their phones.
First proposed in 2019, the beta version went live in January 2021. It includes:
- A single log in platform where people can submit and track license and permit applications
- Guidance on zoning and a step-by-step guide to opening a business in Miami
- Public sector procurement opportunities with the City of Miami
- Resources for business owners, including financial tools for housing and healthcare
- Open data on all permits issued since 2014
- The Miami Opportunity Center - a platform to connect local employers with qualified job seekers
The platform was build by a team of the city’s compliance officers and zoning experts, who, in a process similar to the Institute for Justice report’s methodology, conducted their own walkthroughs of the existing business registration process to understand the burden experienced by entrepreneurs.
They also worked with in launching the platform, Miami Chief Innovation Officer Michael Sarasti linked the platform to the city’s wider post-pandemic recovery: “Business licensing is a huge part of recovery because there’s going to be empty storefronts, and we can’t possible look people straight in the face when they’re trying to open up new businesses now and tell them, ‘No, this is a six-month process’”.
eStart has been well received within the city and among wider digital government advocates and provides a positive example for cities across the U.S. and further afield.