Opinion piece: Facilitating new businesses is crucial to your city’s economic growth. “One-stop shops” like the one in Kansas City, MO can help streamline the process of opening a new business.
In February, researchers from the Institute for Justice published a study study analyze barriers to starting small businesses. “Too often, entrepreneurs face local regulatory constraints and find themselves trapped by high fees, long wait times and complex paperwork,” the report begins. “These burdens amount to a death by a thousand cuts, unless aspiring business owners can successfully overcome them before reaching opening day.”
The study analyzed the steps required to open a business in 20 large and medium-sized US cities, and their results were staggering. Opening a restaurant in Boston involves a staggering 92-step process. In Detroit, it’s 77 steps. In Atlanta, it’s 76.
Such complex bureaucratic processes and local regulations can stunt a city’s economic growth and leave people in disadvantaged communities behind. The City of Kansas City, Missouri provides a model for how other city agencies can overcome barriers to starting a business in their city.
For nearly five years, I’ve run the city’s small business office, KC BizCare, helping to support more than 2,000 entrepreneurs a year in building new businesses. As a free business resource, advocacy and information center for new and existing businesses operating in the city, we strive to help local entrepreneurs through the regulatory process of starting a business in the city. By creating or strengthening similar “one-stop shops” in cities of all sizes, we can invest in our entrepreneurs and in their dreams.
The first part of the challenge, as you can imagine, is the process itself. It is imperative that all cities assess and streamline this process as much as possible. The government should support new businesses, which expand the local economy, tax base and employment opportunities – not stand in the way. We are working, for example, to “de-silo” departments that impact the business regulatory process (i.e. permits and authorizations) and identify ways to streamline (via a checklist) or collaborate to improve response times to the process.
Take zoning clearance for business license purposes. KC BizCare initially did not process zonings, but we have found them to be a major source of delay. Today, thanks to our technology, we process approximately 40% of all zoning applications for the purposes of a commercial license, which are otherwise carried out by our planning department. (We do not do rezoning or residential zoning.)
The second part of the challenge is to navigate this process. This is the main objective of KC BizCare. We help businesses that start, grow and relocate, but the vast majority of our work involves helping new businesses. As part of our mandate, we advocate for the streamlining of initiatives to eliminate barriers to entry and systemic issues that impede a business’s ability to grow in Kansas City. We are also working on inclusive sourcing initiatives to create more small business contracting opportunities and use our buying power to help grow and support small businesses that do business with the city and local public bodies.
KC BizCare is located on the first floor of City Hall, which is key to improving the efficiency of a one-stop shop: ensuring its location is both convenient for the public and close to other services related. The office is co-located with the commercial licensing team within the finance department. When we assist an applicant, we may walk that person along to apply and pay for a business license.
We have also created a virtual one-stop shop, offering a personalized checklist tool that can be customized for an individual business. It provides links to relevant online applications in an appropriate order, as well as contact information for city, state, and federal government resources.
We have also built a network of partners – primarily non-profit Entrepreneurship Support Organizations (ESOs) – to whom we can refer entrepreneurs for technical assistance. These ESOs help small businesses refine their business plans, for example, and prepare to seek the necessary financing. Ensuring that SDOs are prioritized locally and have sufficient capacity themselves is extremely critical to creating a one-stop-shop and a strong ecosystem.
Together with this network and others, we are finding even more ways to circumvent obstacles. We listen to and respond to the frustrations that ESOs or their customers have in any aspect of the startup process.
In this context, we are working with national organisations, in particular the National League of Cities And Right to start. The National League of Cities is our partner through its City Inclusive Entrepreneurship Network. Through this network, KC BizCare is working to expand its reach to Hispanic businesses and create access to start-up capital by introducing a microcredit platform. Kiva in Kansas City. Through Right to Start, a nonprofit that champions entrepreneurship as a civic priority, we advocate for the removal of barriers to entrepreneurship nationwide.
A growing focus of all of our work is data collection, so that we can better understand the demographics of the local entrepreneurial community. A one-stop shop is generally considered to focus on one direction: helping small businesses that need help. But we must continually understand the overall entrepreneurial landscape in order to reshape it.
Our office works with a software developer called Qwally that creates accessible, cloud-based sales engagement and sourcing software. This allows us to collect data that will provide a complete picture of the local landscape and thus better focus our efforts where they are needed most. The software helped our office create a custom checklist, highlight local resources, and produce data dashboards to capture and communicate this information.
Today, young companies are creating almost all the work growth in America. This means that facilitating the growth of small businesses is essential to strengthening the US economy, as well as creating thriving local economies. One-stop shops like KC BizCare are key to realizing this potential.
Nia Richardson is the Managing Director of KC BizCare in Kansas City, MO.
