Regulatory death by a thousand cuts is a problem that affects many small businesses and entrepreneurs at the local level, both those looking to start up and those who are already established and must deal with ongoing rules and requirements to continue operating and growing.
But it does not have to be this way.
By adopting best regulatory practices to address the needs of their small-business communities, city officials can improve the landscape for entrepreneurs. We want to partner with officials to help them streamline red tape to make life easier both for those who enforce the rules and those who must navigate them.
Who We Are
The Institute for Justice (IJ) is a nonprofit law firm dedicated to making it easier for entrepreneurs to earn an honest living doing what they love. Cities Work, an initiative of IJ, is aimed at making it cheaper, faster, and simpler to start a business in cities, assisting local policymakers by researching regulations and pursuing key legislative reforms.
Through Cities Work, we work alongside entrepreneurs to help them understand how to navigate rules for starting a small business while advocating for themselves. We collaborate with regulators seeking to improve their cities’ processes, research strategies to improve the laws and practices on the books, and advance solutions.
The Path Forward
In preparing the research for this report, we have hosted roundtables with and spoken to entrepreneurs across the country to hear their perspectives on what it is like to start a business at the local level. Some of their stories are featured throughout this study.
Informal surveys of entrepreneurs from IJ-hosted roundtables in some of these cities have found that the most popular ways to address the cost, delays, and complexity of the business start-up process in cities are lowering license fees, creating a true one-stop shop, and simplifying licenses for new businesses. 1
While specific recommendations for a particular city should take into account the unique challenges entrepreneurs face there, policymakers should follow general best regulatory practices established by their peers and outlined in this study. The goal should be to make it cheaper, faster, and simpler to start a small business.
Lower the cost of doing business by cutting licensing and permitting fees that act as barriers to economic mobility for lower- or middle-income entrepreneurs.
Adopt more flexible fee schedules, accommodating new or small businesses that pose little threat to public health and safety, while also prorating fees for shorter license terms.
Create a true one-stop shop for starting a business, where applicants can access and complete all the paperwork they need to get their business off the ground in one portal with a single sign-on.
Reduce the number of times that entrepreneurs must make in-person trips to government offices, offering clear step-by-step guides for how to complete key registrations online.
Review zoning and permitting rules to reduce the number of steps entrepreneurs must complete to get the sign-offs they need. Excess procedures or paperwork for starting a business should be combined or eliminated.
Cut business licensing requirements to focus agency resources on a smaller set of businesses that pose health and safety risks to the public.
For recommendations tailored to their city, policymakers can visit that city’s profile page in the report or contact IJ for more information. Our goal is to work collaboratively with city officials across the country to make it cheaper, faster, and simpler for all entrepreneurs to start a business.