New IJ Report Tackles Regulatory Barriers to Business in Cities

Alex Montgomery
Alex Montgomery  ·  April 1, 2022

Becoming a barber is a lot tougher than you might think. According to IJ’s report License to Work, barber licenses require applicants to spend, on average, 368 days complying with costly state government regulations—all before earning a dime.

But imagine that a barber, finally licensed, wants to capitalize on his newfound skills by opening his own shop. Doing so won’t be easy as he navigates local requirements—zoning, building permits, taxes, inspections, business licensing—on his journey to opening day. He will have to visit government offices, pay for registrations, and try to comply with confusing guides and websites, struggling for clear answers from officials.  

Adding these burdens up puts the regulatory hurdles into perspective. A new IJ report, Barriers to Business: How Cities Can Pave a Cheaper, Faster, and Simpler Path to Entrepreneurship, does just that. It finds that across 20 large and mid-sized cities, starting a barbershop requires entrepreneurs, on average, to pay over $3,200 and complete 55 steps just to get up and running.

Watch the report video!

Aspiring barbershop owners are not alone. To start a restaurant, entrepreneurs must pay more than $5,300 and complete 16 forms and 61 steps, nine of which are in person. And even businesses more accessible for those on the first rungs of the economic ladder—food trucks and home-based ventures—are saddled with costs and compliance.  

But in America you shouldn’t need a law degree or a pile of cash to start a small business. That’s why Barriers to Business also marks the launch of a new IJ activism initiative called Cities Work, dedicated to making it cheaper, faster, and simpler to start a business in America’s cities.   

For years, policymakers and advocates have recognized that the process of getting a business off the ground is mired in red tape. But rarely are city officials able to visualize the full picture of how those requirements create daily barriers for the average small-business owner. Even more rare are successful efforts to hack away at the local regulatory thicket by eliminating unnecessary rules.    

With the launch of Cities Work, IJ’s team of city policy experts and grassroots organizers is poised to give city officials the tools they need to truly ease the cost of doing business—to eliminate red tape and unleash job-creating small-business owners in cities and towns across the country.  

Barriers to Business diagnoses the problem by tallying the fees and steps needed to start five common business types, showing how 20 cities’ rules stack up against one another. It includes a “one-stop shop” analysis, which measures how well city websites guide entrepreneurs, and identifies the barriers that all small businesses must navigate. The report also puts forward customized policy recommendations that city officials could run with tomorrow, from implementing one-stop permitting portals to expediting zoning reviews for home-based businesses.   

By combining IJ’s groundbreaking research with boots-on-the-ground activism, IJ stands ready to make those recommendations a reality and break down regulatory roadblocks from coast to coast.

Alex Montgomery is IJ’s city policy associate.

Subscribe to get Liberty & Law magazine direct to your mailbox!

Sign up to receive IJ's bimonthly magazine, Liberty & Law, along with breaking news updates about the Institute for Justice's fight to protect the rights of all Americans.