Newark has an online portal to help applicants navigate business licensing requirements and lists license types with an overview of the regulatory process. But officials must streamline the actual rules for starting a business, reduce fees, increase flexibility, and provide more information on regulatory requirements that are unrelated to business licensing.
In Newark, the cost, delays, and complexity imposed by the regulatory process for small businesses make it difficult—or sometimes even impossible—for entrepreneurs to start the ventures of their dreams and pursue their passions.
Fees for getting started quickly add up. For example, Newark entrepreneurs must pay 14 different fees totaling $4,765 to start a restaurant and 12 fees totaling $3,238 to open a barbershop.
Despite having an online business portal, Newark does a poor job of providing information to entrepreneurs on regulatory requirements unrelated to business licensing. This leaves applicants in the dark regarding how zoning and permitting processes work, making it incredibly difficult to start their dream ventures. Additionally, home-based businesses must complete six in-person steps to start their businesses, which is high compared to other cities and imposes significant delays.
Zoning and permitting in Newark is complicated, requiring entrepreneurs to go to various agency offices to sort out how rules apply to them. For example, it takes 19 steps to start a home-based tutoring business, which is relatively high compared to other cities studied.
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.
Some applicants for business licenses must request background checks from state police, acquire approval from the Newark Police Department, and settle any outstanding citations or warrants. These requirements deter vulnerable residents, including returning citizens, from starting businesses. In addition, other business license applications, such as those required to start a restaurant, require the applicant to certify whether they have ever been convicted of a crime.
License periods for business licenses are inflexible. For example, a restaurant license is valid from the 1st of February to the 31st of January, regardless of when it is issued.
Additional restrictions burden entrepreneurs seeking to start out small. Home-based businesses are heavily restricted by Newark’s zoning rules, which prohibit client visits and non-resident employees. An applicant for a food truck license must submit a certificate from a physician certifying that they have been examined and are “of sound physique” no more than 60 days prior to filing the application. Food trucks also cannot vend in the same location for more than 15 minutes after a sale, unless the truck is being inspected by interested customers. After 15 minutes without customer visits, the truck must move at least 30 feet and not return to the previous spot for at least two hours.
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 Newark. City officials should:
Improve the availability of information to guide entrepreneurs through the process of starting a business—especially when it comes to obtaining zoning and building permits—by creating a true one-stop shop for applicants.
Simplify the process to obtain building permits and business licenses by combining steps and paperwork, creating more guides for complying with rules, and lowering fees.
Reduce the number of business license categories, which, at 45, is higher than in many cities studied.
Increase flexibility of business license terms to accommodate the entrepreneur.
Eliminate background checks that are unrelated to the nature of the occupation, which deter vulnerable populations from applying.
Eliminate unnecessary restrictions on occupations best suited for entrepreneurs seeking to start out small. Allow in-home client visits for home-based businesses and eliminate the physical examination requirement and duration restrictions on food trucks.
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