Entrepreneurs in New Orleans must navigate lengthy processes and complex red tape to get their businesses off the ground. While the city offers the One Stop Shop App as a centralized online location to submit the license application, it is still a new offering and has not yet expanded to all licenses and permits.
In New Orleans, the cost, delays, and complexity of the regulatory process for small businesses make it difficult for entrepreneurs to start their ventures.
It costs $1,385 to start a barbershop and $2,253 to start a restaurant in New Orleans. Additionally, home-based businesses must obtain a $190 occupancy permit in addition to other licensing requirements to operate.
Burdensome regulatory requirements delay aspiring entrepreneurs from opening up shop. Bookstore owners must complete 11 requirements in person, significantly slowing down the startup process.
Home-based businesses require 16 steps to start up, mostly driven by the occupancy permit process. Bookstores must complete 44 steps to start up, which is the most of the five business types in New Orleans. Additionally, business license fees in New Orleans are based on a combination of fees and taxable revenue, which can make it difficult to figure out how much licenses cost.
Starting a Business in New Orleans: By the Numbers
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.
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.
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.
Numerous licenses require applicants to certify they have not been convicted of certain types of felonies. Instead of blanket exclusions that keep anyone with a certain type of criminal record from obtaining a license, denials should be limited to recent, serious crimes that relate directly to the occupation.
Late fees for business licenses in New Orleans can add up fast. For every month late, a penalty of 5% of the license or permit amount is accrued, up to a maximum of 25% of the entire license cost.
New Orleans saddles specific occupations with additional burdens. City code prevents more than 100 mobile food permits to be issued for the entire city at any time. The city also licenses tour guides, which is constitutionally problematic because one should not need a government license to speak for a living. The fee is $50 for a new license and $20 to renew a license. Licenses are valid for two years. Applicants must pass a test on the history and culture of New Orleans and must pass a federal background check. Additionally, this license also requires applicants to have no felony convictions within the past five years.
Accommodations for New or Small Businesses
No notable accommodations.
Officials and policymakers have the opportunity to make it cheaper, faster, and simpler to start a business in New Orleans. City officials should:
Simplify fee schedules for the general business license with a standard fee structure such as a flat fee or revenue-based fee.
Continue to build out the One Stop Shop App and make it the true hub for all interactions with New Orleans city government for starting a business, filing license and permit applications, and making payments to the city.
Reduce the number of steps, forms, and in-person agency visits required.
Eliminate unnecessary restrictions on specific occupations, such as the tour guide license and the cap on the number of permits issued to mobile food vendors.
new orleans, louisiana
Topher Patch is the founder of Meyer’s Frozen Lemonade, a frozen treat cart found roaming neighborhoods and parks across New Orleans. His cart is a unique setup with a freezer, power source, sink, and water tank set up on a tricycle. After moving from Rhode Island to New Orleans in 2004 to attend college, Topher worked in banking for over a decade before he decided it was time for a change. In 2019, he started applying for permits for the business. And in 2020, he began selling homemade frozen lemonade made with Meyer lemons, which are sweeter than regular lemons, from a bicycle cart. Topher was excited to bring a traditional New England frozen treat to New Orleans. Doing that, however, was anything but easy. He sent in many documents to the city, only to have them lost. “And getting them on the phone is impossible. Unless you can get an appointment (which is nearly impossible due to the COVID-19 pandemic) it’s very difficult to talk to someone to have your questions answered.” Topher lost plenty of time in this back and forth.
To make matters worse, the Louisiana Department of Health has refused to approve his cart after two years of back and forth with Topher. Despite spending countless hours documenting the health and safety of his business, the department will still not issue him a health permit and will not give him clear directions on how to receive their approval. “They’ve never really seen a concept like this. Something that’s not an actual food truck. And they don’t even know what they really want from me. So it’s easier to say no,” said Topher. And without a health permit, Topher is hesitant to expand his business at risk of being shut down. “To start a business, it’s a lot of investment. And for me to invest, I want to have the assurance that my business is going to be approved, since the carts will be constructed to meet their requirements.”