Business startup in one day? Washington and KC peel away the red tape

One day. That’s how long it ought to take to figure out and apply for all the licenses and permits needed to start a business.

Reality is slower and “somewhat frustrating,” Kansas City lawyer and entrepreneur Chris Brown said about his personal business startup experiences.

“It’s an aspirational goal,” Maria Contreras-Sweet, head of the U.S. Small Business Administration, said Wednesday in launching Startup in a Day. It’s a White House initiative that includes Kansas City and 11 other municipalities.

The White House announced the effort to entice faster, simpler licensing and permitting processes for new businesses at the federal, state and local levels. Its aim is to make job-creating entrepreneurship less frustrating.

“It takes too long to start a business in too many places. Often there’s just too much red tape,” Jeff Zients, the White House Economic Council director, said during a conference call with reporters.

As part of the initiative, the Small Business Administration has offered $50,000 prizes to up to 25 cities that create or implement tools to make the process faster. A $250,000 top prize awaits the city that produces an open source solution that others can pick up and use.

Much of the effort on this front so far has focused on moving the permitting and licensing process online, rather than requiring entrepreneurs to visit various agencies or mail documents.

Kansas City’s processes are online, one reason it was accepted into the initiative with the other 11 cities.

Rick Usher, assistant city manager for small business and entrepreneurship, said someone walking in off the street also could use the city’s computers to obtain a federal employer identification number, register the business with Missouri and get a city business license from the staff in less than an hour.

He also notes that businesses can manage their account with the city online.

Online, however, isn’t enough. Simpler is another key.

“I never walked into any office to do anything” when starting businesses, Brown said.

He ended up turning much of the process over to his accountant and still doesn’t understand why his company Venture Legal, has three different account numbers with Kansas City.

Dan Schmidt, Brown’s accountant at EBCFO LLC, rated the city’s online system as “reasonably good” for a municipal system, and he spots improvements from time to time. Applying for those three numbers is quick, he said, but getting them takes a couple of weeks.

“It would be great if we could get them in real time,” Schmidt said.

Usher said the city is looking at a single ID tool. The city’s KC Bizcare site helps entrepreneurs find what they need to start and open a business as well as connections to free resources and other information.

The White House effort hopes to spread practices used in Kansas City and the other cities as well as get them to generate new ideas to share throughout the nation. One front open to improvement is combining multiple agencies under one licensing and permitting process.

Backers were careful to say that the 24-hour goal is to apply for permits and licenses. Getting all of them can take longer, though getting approvals online can hasten that effort, too.

This story was originally published June 10, 2015 at 6:05 PM with the headline "Business startup in one day? Washington and KC peel away the red tape."