City government should be helping small businesses, not continually hampering them. The 71,000+ small businesses in San Francisco are vital to the economic health of the city, employing about half of our workers and contributing 52% of our sales taxes. And how does the city government thank them? Onerousness.
The Director of the Office of Small Business says that just to open a restaurant in San Francisco will take about nine to fourteen months, along with filing fourteen or more applications for permits, each with high filing fees. Oakland, by contrast, has an average opening period of only four to nine months and only three permits. In fact, before 1987, new small businesses in San Francisco were approved at the rate of 97%. Yet by 2007, that rate fell to a mere 37%. And once they are approved and operating, they are burdened with excessive fees. We have to do more to facilitate small business growth.
In our own neighborhood, the owner of the Ice Cream Bar in Cole Valley spent two years trying to open for business, with costs exceeding $300,000 and more than $30,000 in city fees.
1. Streamline Small Business Permits and Regulation
We need a re-engineering for all city agencies involved (i.e. building, fire, health, etc.) to ensure a consistent, fair, and legal process is applied to existing and new small businesses.
New business applicants must have a realistic understanding of what the city will require them to do and pay. The Small Business Office should be able to quote all project requirements, fees, etc. up front, and at the first meeting for a small business project, Planning Department staff should have a list of everything needed for approval, including: all fees; all code specifications required by all agencies involved; all time-frames for applications, inspections, project reviews, etc.; and a plan for department personnel who will be assigned to handle the matter. Once a project starts, Building Department inspectors and codes must be easily comprehensible and uniformly administered. Our small business entrepreneurs deserve clarity so they can create accurate timelines and budgets.
For routine business permit applications, an ISCOTT-like board should be able to review and approve the applications. That is, a one stop, one meeting board, where representatives of the relevant City agencies weigh in and can definitively issue city approval for a project.
2. Actually Help Small Businesses Succeed
We need a fee structure that does not unduly burden small businesses with start-up costs and recurring fees (tax breaks should not be the exclusive domain of large companies). Fees should be lower and variable when appropriate, e.g. based on revenue. We need a creative small business loan program that evolves with a changing economy and helps entrepreneurs’ access capital. And we need a Small Business Office that represents the small businesses of the city, to advance their interests, and ensure the process of getting into business and staying in business is efficient, effective and predictable.
The Board of Supervisors should approve legislation to establish neighborhood Corridor Managers, who will assist and promote their commercial corridors. And the Board should encourage Community Benefit Districts in “mature corridors”. While it is not the purview of city government, I would also like to see the SF Chamber of Commerce assist in funding the Corridor Managers, and the Chamber and SF Travel promote those corridors to entice visitors.
We need leadership from the Board of Supervisors to implement these reforms on behalf of small businesses, and I intend to provide that leadership.*
Here is a department-by-department list of what I want to see happen:
Elected Officials (BOS & Mayor):
- Re-vamp the Small Business Office; mandate and oversee a streamlining of the regulatory process
- Reform tax structure and reduce fees to encourage hiring and business growth
- Establish and fund Corridor Managers to improve commercial corridors
- Promote Community Benefit Districts for advanced corridor development
Planning Dept. / Commission:
- Create uniform permit price lists and process checklists for all categories of businesses
- Disclose prices for all permits, services, code compliance, etc. up front so those starting new businesses can know what to expect
- Create one-stop approval process where all City departments approve/reject/modify applications (a la ISCOTT)
- Streamline code definitions so they can be uniformly applied
- Ensure Inspectors in the Dept. of Building Inspection (DBI) interpret codes consistently and uniformly
- Have DBI coordinate with other City agencies to remove conflicting code requirements
SF Chamber of Commerce & SF Travel:
- Provide funding for Corridor Managers to be effective
- Develop promotional information on neighborhood commercial corridors for SF visitors
I will be a voice for small business development, and I hope you’ll invite me to the grand opening of your new business in District 5.