Would you want to open a restaurant in a city that requires 35 steps, multiple licenses, and $3,750 in fees just to get started? That’s what researchers from the Institute for Justice found it takes to open a restaurant in St. Louis. Does that sound like an inviting business environment to you?
The Institute for Justice recently released a report that analyzes the barriers to business in cities across the country. The authors used model businesses to demonstrate how difficult it would be to open a restaurant, bookstore, food truck, barbershop, and home-based tutoring business in St. Louis and other cities. The report examines three aspects of the regulatory process to evaluate the cities: cost, delays, and complexity. Here’s how St. Louis fared for each:
Cost: St. Louis doesn’t do well here because of the city’s fee structure. The city uses a graduated fee system based on the number of employees, so fees can become extremely expensive as businesses grow.
Delays: This report found that a general lack of clarity (and especially a lack of information online) leads to many delays and makes the process more complicated than it seems.
Complexity: The process of starting a business in St. Louis can be very complex, sometimes requiring dozens of steps, numerous forms, and multiple business licenses.
Can we really say that St. Louis has an inviting business environment when the city fares so poorly in all three aspects? Lawmakers say they want more opportunities for entrepreneurs and options for consumers, but actions speak louder than words. St. Louis lawmakers should make the city more appealing for businesses by lowering fees and simplifying processes. Starting a business is expensive enough without the city requiring exorbitant fees. And the fact that there is very little access to information online seems like an outdated problem that unnecessarily complicates the process.
If we want more business in St. Louis, we need to have an environment in which businesses can thrive. If the barriers are too high from the beginning, we’re not going to see entrepreneurs and new businesses coming to our city.
