Unintentional Consequences: Regulations Impacting Washington Small Businesses

Local Governments Should Support Small Businesses, Not Hinder Them

In a recent study conducted by the Institute for Justice, it was found that small business owners face numerous obstacles when trying to comply with local regulations. These regulations, which include occupational and business licenses, health regulations, building codes, taxes, fees, and paperwork, can be overwhelming for entrepreneurs looking to start or grow their businesses.

According to the U.S. Bureau of Labor Statistics, small businesses with 249 or fewer employees have accounted for 55% of total net job creation over the past decade. Additionally, the Small Business Administration reports that small businesses employ 46% of private-sector employees and pay 39% of private-sector payroll. These statistics highlight the importance of supporting small businesses in order to stimulate economic growth and job creation.

The Institute for Justice’s study, titled Barriers to Business, focused on 20 cities and examined the obstacles faced by entrepreneurs in starting a business. In Seattle, for example, the study found that restaurants face high costs and numerous bureaucratic hurdles when trying to open their doors to customers.

To address these challenges, the Institute for Justice has published the Cities Work Playbook, a comprehensive guide to reforming local regulations and making it easier for entrepreneurs to operate. The playbook outlines steps for assessing the business environment, identifying barriers, building coalitions, collaborating with local government, and generating media attention to drive change.

It is crucial for cities to shift their focus from providing subsidies to large corporations to supporting small startups and innovative businesses. By implementing reforms and streamlining regulations, local governments can create a more conducive environment for small businesses to thrive and contribute to the local economy.

The Institute for Justice’s City Works Playbook serves as a valuable resource for cities looking to support and empower small businesses, ultimately fostering economic growth and job creation in their communities.