St. Louis hair braider Tameka Stigers can untangle knots. But unraveling municipal rules and regulations was harder when she opened Locs of Glory, a natural hair care and wellness salon near Forest Park.
The city requires business applicants to fill out multiple forms and submit hard copies, and Stigers says agency employees sometimes lost her work.
“This frustrates the heck out of you because they do so much by paper,” she says. “You have to submit everything in person. If you mail it, you can’t trust that they won’t lose it.”
Each trip downtown pulled Stigers away from other tasks.
“A lack of cohesive online resources is definitely an impediment to being a successful business owner,” she says. “I shouldn’t have to spend countless hours from my day to go downtown to submit forms when I should be running my salon and seeing clients.”
Other St. Louis entrepreneurs face similar challenges. “Barriers to Business,” a new report from the Institute for Justice, shows a complex and often opaque application process for aspiring business owners. The study, published Feb. 8, 2022, analyzes city codes and startup requirements for five common business types in 20 U.S. cities, including St. Louis.
When diagrammed, the number of steps involved is staggering. Opening a hypothetical barbershop, for example, is a 27-step process in St. Louis. Those who attempt the feat must fill out 10 forms, complete at least six in-person activities, interact with eight different city and state agencies, and pay 11 fees totaling $5,034.
That’s enough to leave any business applicant pulling out her hair.
Opening a St. Louis restaurant is even more daunting. The process involves 35 steps, 11 forms, eight fees, six in-person activities, and interactions with nine different agencies. Even launching a basic retail outlet with minimal health or safety risks requires skillful navigation. Opening a hypothetical bookstore in St. Louis would involve 17 steps, six forms, four fees, two in-person visits, and interactions with eight different agencies.
Some entrepreneurs, hoping to avoid the challenges associated with brick-and-mortar businesses, start smaller. But even opening a food truck involves significant hassle in St. Louis.
Launching a home-based business is easier, although entrepreneurs who work at home face other challenges in St. Louis. If they want to sell to clients in their homes, for example, they must obtain a conditional use permit — an onerous and expensive zoning process that forces these entrepreneurs to gain approval from neighbors while defending themselves at public hearings.
Aspiring business owners face similar hurdles nationwide. Some cities are friendlier than others, but going from concept to grand opening is difficult everywhere.
The report likens the process to death by a thousand cuts. No single step is fatal in isolation, but the cumulative effect can be overwhelming. Aspiring entrepreneurs with fewer resources and limited access to capital suffer the most. Some must choose between giving up altogether or operating in the informal economy.
Even when entrepreneurs succeed, the effort represents significant waste. Resources spent deciphering cryptic rules are not spent on core business activities. Time, energy, and money must be diverted.
Despite the difficulty, most entrepreneurs are eager to comply with municipal rules. People who invest their life savings in an enterprise want it to be legitimate. But they struggle to know what the procedures are — and in what order to complete them — because many cities do a poor job communicating requirements.
St. Louis offers a Business Assistance Center that helps new businesses get started by walking applicants through the regulatory process. This is a step in the right direction, but the city can do better. Entrepreneurs need a true one-stop-shop, where they can apply and pay for licenses and permits in one place online. To be complete, the hub must include zoning and building permit information that currently is lacking. Lower fees and fewer steps would be nice too.
Stigers persevered and opened her salon, but other entrepreneurs still face obstacles. Rather than tying them in regulatory knots, St. Louis should get out of their hair and let them work.
Andrew Meleta is an activism associate at the Institute for Justice in Arlington, Va., and co-author of “Barriers to Business.” Daryl James is an Institute for Justice writer.
