Entrepreneurs in Birmingham must navigate unclear websites and confusing red tape when trying to start their businesses. The city does not meet any of our one-stop shop criteria, tying with Des Moines for last place among our 20 cities studied. Officials must increase the accessibility of clear startup guidance and streamline license categories to simplify the process.

Key Takeaways

In Birmingham, the cost, delays, and complexity of the regulatory process for small businesses make it challenging for entrepreneurs to open up shop.

Cost

Based on our analysis of five specific, common business types, opening a business in Birmingham comes with a steep price tag. Restaurants must pay 16 different fees totaling $4,403 to start their business, which includes a $1,710 building permit fee. A barbershop pays 20 fees totaling $2,933 to open shop.

Delays

Birmingham scores a zero out of five on our one-stop shop score. Barbershop owners must visit agencies in person seven times, in addition to undergoing their state-level barber educational and licensing requirements. All of this lengthens the time it takes to start up.

Complexity

Restaurants and barbershops in Birmingham must fill out 15 forms each—representative of what many entrepreneurs in the city must navigate when trying to start up. The city fails to connect applicants to other levels of government and effectively guide them through the startup process, leaving entrepreneurs to navigate a labyrinth of regulatory requirements on their own.

Starting a Business in Birmingham: By the Numbers

MIN
MAX
Total Cost
We calculated this metric by totaling the fees for all the licenses, permits, and registrations each business needs to get started.
Number of Fees
We calculated this metric by counting how many fees governments impose on each business for completing registrations and paperwork.
Agencies Involved
We calculated this metric by totaling the number of agencies entrepreneurs must work with in order to get up and running—whether in the form of submitting paperwork to an agency’s staff, or in terms of abiding by regulations that an agency has promulgated.
In-Person Activities
We calculated this metric by counting the number of compliance activities each entrepreneur needs to complete in person, rather than online or by mail.
Number of Forms
We calculated this metric by counting the various forms and applications each business needs to submit
Number of Steps
We calculated this metric by totaling the discrete tasks an entrepreneur must complete to start each of the business types.

Business Licensing

License by Tax

Birmingham requires all businesses to pay a fee and obtain a city tax certificate.

Yes

General business license requirement

N/A

Estimated number of license categories

293

Estimated number of license tax classifications

0/5

One-Stop Shop Score

  • Connecting city requirements with processes from other levels of government
  • Completing forms and registrations through the portal, not through each agency’s own website
  • Covering all city requirements, not just requirements for getting a business license
  • Providing a single log-in opportunity so entrepreneurs can organize information and track progress in one location
  • Guiding entrepreneurs effectively through the process

Birmingham Fast Facts

Population
(2020)

200,733

10-Year Population Growth
(2010 – 2019)

-1.5%

5-Year Unemployment (2016 – 2020)

4.3%

Median Household Income
(2019)

$35,346

New Firms Started (2018)

111 per 100,000 people

Notable Barriers and Roadblocks

Birmingham has nearly 300 tax classifications—more than most of the cities we studied. City websites are sparse, containing incomplete information, lacking specific guides to starting particular businesses, and offering little guidance on certain fees. The city trails behind other cities in the study, such as San Francisco and Seattle, when it comes to providing clear information and guides on city websites.

Home-based business owners face particularly challenging restrictions: Customer visits are prohibited at the home, with no exceptions. This means a home-based tutor—the model home-based scenario for our five-business analysis—would not be allowed to teach pupils at home.

Food trucks also face unique barriers: They cannot vend within 150 feet from any restaurant door, limiting the number of available spots where vendors can operate. Additionally, vendors can only operate from 6 am to 6 pm, eliminating the highly in-demand opportunity to serve late-night customers.

Accommodations for New or Small Businesses

No notable accommodations.

Policy Recommendations

Officials and policymakers have the opportunity to make it cheaper, faster, and simpler to start a business in Birmingham. City officials should:

  • Reduce the number of license tax classifications.
  • Provide clear and concise information online. Guides should be readily available and integrated into site pages, not buried in various PDF documents as they currently are. Guides should be available for common business types and walk entrepreneurs through the general requirements to start their business.
  • Put more forms online and reduce the number of paper forms that must be filled out and encourage county officials to follow suit.
  • Move the home-business certificate of agreement application online and create a one-stop shop for home-based business startups.
  • Allow in-home customer visits for home-based businesses.
  • Eliminate restrictions on the operation of small businesses that are based on protectionism instead of public health and safety, like the proximity restriction for food trucks.