Saturday, April 19, 2014
Inquirer Daily News

Small business, big headache

A DN editorial tackles the plight of small businesses trying to get things done in Philadelphia:

Small business, big headache

A DN editorial tackles the plight of small businesses trying to get things done in Philadelphia:

It's hardly news that Philadelphia holds business, and small business in particular, in the same regard most of us hold bedbugs. When the city was a thriving center for manufacturing, the term "business-privilege tax" might have had less of a contemptible ring to it, but 100 years later, the term speaks volumes about how cruel the city's policies can be for anyone daft enough to launch their dreams here.

One of the most onerous aspects of that business tax - the one that requires new businesses to pay two years of their taxes up front - should win an award in a "Bad government" contest.

Complaints about the business-tax burden are well-documented. Recent new reforms to the business tax provide little cause for rejoicing, though, at least in light of a new report that catalogs the many other obstacles the city throws up to small business.

Actually, the report, "Taking Care of Business: Improving Philadelphia's Small Business Climate," could spark some rejoicing because it is the opposite of a dry and boring report. It is clear, coherent and compelling, and provides action steps and common-sense solutions that could provide some canny elected official - the mayor, for example, or certain members of City Council - with a working blueprint for changing the city's economy. The chamber of commerce should also take note.

The report was created with a William Penn Foundation grant by the Sustainable Business Network (SBN), a membership group that has focused on businesses concerned with the "triple bottom line" of people, planet and profits. (Full disclosure: William Penn Foundation also funds "It's Our Money," a reporting partnership between the Daily News and WHYY.) Initially intended to address some of the barriers its members were facing in launching a business in the city, SBN's research became wider in scope to include all small businesses, and made sure the recommendations it made were universal instead of focused on a particular set of industries.

That's an important aspect, because the 93,000 small businesses here are critical to the city's economy. They create more than half the jobs; 65 percent of jobs created are by companies five years old or less.

And yet the city's treatment of them - from suffocating regulations, daunting requirements for multiple licenses, and soul-killing bureaucratic hoops for the simplest items - like the expensive multi-agency scavenger hunt required to get a hanging sign approved, detailed in the report in a two-page graphic - can be a nightmare.

Mayor Nutter has taken action in creating a Business Services Center, but this should be on his list of priorities for his next term.

Find the report at www.sbn philadelphia.org/sustainability/ download_report_form. Readers can take action by endorsing the report online once they read it. That is, after they stop weeping.

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About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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