I had the interesting experience last week of visiting my local city hall to see if I needed to apply for a business license. Indeed I do! That is no surprise given how bureaucrats and petty politicians love to exert control over others, which it seems is the main function of their jobs. What was a surprise though, is how inefficient, clumsy and expensive the process is, right here in the middle of disruptive, super-efficient and ever lowering-cost Silicon Valley.
In my city, and I suspect all cities, one can’t just start a business. No, that would be illegal. First, one must register and pay the required fees. How hard could that be? Just go online, fill in a simple form, use PayPal and done. Right? Wrong. Instead, my city throws up barriers to initiative, job creation and entrepreneurship.
First, can I register online? Nope. Sure, I can print a PDF and snail mail it to city hall, but I can’t register online. Must be a job-security measure for the employees who input my data from the handwritten form I’m required to turn in.
Second, by law I’m not allowed to start any business activity until the city approves my registration, which according to its handout can take two to four weeks. Do I need income now? Too bad, so sad, no work for me!
Oh, and one slight complication, if I want to use a fictitious business name, say Great Columns R Us, rather than John McDowell’s Columns, I’ll first have to apply for a county Fictitious Business Name. That should be easy, the city and county systems ought to be connected, and city clerks deal with this all the time. Wrong again. The city clerks are unable to answer any questions about county or state requirements. Moreover, no, their systems are not connected. However, they do have a slip of paper with some Web addresses listed. Unfortunately, it’s out of date and the listed URL returns an error.
Being persistent, I find the right county Web address, surf on over to apply online, and, well what do you know, no ability to apply online. Moreover, the application must be notarized (do notaries with their hand stamps even still exist?). Then, a Public Notice ad must be placed once a week for four weeks in a local newspaper before the application is approved. So now, we’re at two months or more before I legally can go into business, assuming all goes well in the land of bureaucratic paper shuffling.
Do taxes pay for this? Of course not. If I want to start ghostwriting columns out of my house, I must pay the city $257 for the privilege of typing at home. For the FBN, the county wants to charge $34 and this newspaper charges $42 for the Public Notice.
There you have it, two months and $333 later, it’s legal for me to go to work.
Beyond a frustrating, hair-pulling experience, is this situation worth noting? It certainly is, since entrepreneurship of all kinds is what drives growth (anemic as it is) in our state’s economy.
California is powered by small business, most of those being non-employers, but still providing an income for the owner. According to the latest Small Business Administration data, almost 3 million Californians own a non-employer business. An additional 6.3 million work for small firms, or more than 50 percent of private sector employees.
Someone who had an idea, or needed extra income started every one of these firms. For the most part, these are not Valley techies or recent graduates disrupting entire industries. Most of these businesses are formed in the construction or service sectors, and those are subjected to 40 licensing boards designed to make it harder to enter the industries they control.
As I found out firsthand, our state and local governments throw up significant barriers to average Californians who just want to put a little extra money in their pockets. In a state with an unemployment rate that is 28 percent higher than the national average and with 24 percent of its citizens living in poverty, these barriers to initiative, job creation and entrepreneurship really are worth noting.
John McDowell is a longtime county resident having first moved to San Carlos in 1963. In the intervening years, he has worked as a political volunteer and staff member in local, state and federal government, including time spent as a press secretary on Capitol Hill and in the George W. Bush administration.