If you’re planning to start a small business in the District, you may also want to consider some anger management classes.
Small-business owners give the District a D+ in a new survey that asks startups to rate their city based on things like friendliness, regulations, training programs, and health and safety. Although the District rates high for its economy and its programs in place for established businesses, the ease of starting a business here remains the biggest headache aspiring entrepreneurs endure.
The findings were released in a survey by the Kauffman Foundation and Thumbtack.com, a website that connects small-business owners to customers.
“People were saying once they were in business, it was fine,” said Sander Daniels, co-founder of Thumbtack. “But for some reason it was difficult to find information online or to get a straight response from city officials on how to properly file paperwork, permits, etc.”
Although D.C. last year raised its income tax for high earners — a move that opponents said would hurt small-business owners — Daniels said the increase is less of an issue.
“Small businesses told us they care almost twice as much about professional licensing regulations as they do about the tax rate,” he said.
The District earned an F for its ease of starting a business, as owners surveyed repeatedly said the process was cumbersome.
“It’s very difficult to gain support and funding in the District of Columbia,” said an interior designer based in Northwest D.C. whose identity was kept anonymous by Thumbtack. “[The Department of Small and Local Business Development] is an office of 19 people that does virtually nothing to assist small business get started. Instead of having financing or grant opportunities in place, we have a payroll-heavy department that does little more than hand out names of lending institutions.”
In fact, a separate report issued last month by the Arlington-based Institute for Justice says the city’s licensing requirements are among the country’s most demanding, which included having the toughest requirements in the country for interior designers.
But it’s not all bad news. The District received an A from business owners for the training it offers and the networking programs available to them. The city also ranked second among 40 cities total for its economic health.
District leaders have acknowledged the less-than-stellar reputation the city has among small-business owners. In April, Mayor Vincent Gray introduced legislation that would give an income tax break to individuals who invest in technology startups in the District.
A spokesman for the mayor said Sunday that Gray also planned to announce “a business-regulatory-reform task force made up of diverse representatives of the District’s business community to review the city’s rules, regulations, fees and tax structure, and make to recommendations on how we can make it easier for companies to start up, grow and thrive in our city.”
