FACTS: The White House and Small Business Administration Launch Startup in a Day Initiative and Prize Competition
buzzz worthy. . .
Yesterday,
the White House and U.S. Small Business Administration (SBA), in
coordination with the National League of Cities, announced the launch
of the Startup in a Day
initiative, a partnership with U.S. cities to develop online tools that
let entrepreneurs discover and apply—in less than a day—for local,
state, and federal requirements needed to start a business.
11
Pioneering Cities Pledge to Reduce New Business Licensing and
Permitting Process to Less Than One Day; August 4 Set as Date for
First-Ever White House Demo Day Focused on Inclusive Entrepreneurship
“I’m
calling on city halls across the country to join the initial eleven
mayors in a simple but powerful pledge to entrepreneurs and small
business
owners: If you want to start a business, we’ll make it so easy to
navigate the license and permitting system online, that you’ll be off
and running within 24 hours,” said President Obama.
Also yesterday, the White House announced August 4 as the date for the first-ever
White House Demo Day,
which will bring together entrepreneurs from all walks of life, from
all across the country, to “demo” individual success stories and build
on efforts like Startup in a Day to empower diverse
innovators from around the country to launch and scale companies.
The Startup in a Day Initiative
As
any entrepreneur or small business owner knows, starting or expanding a
business often entails dealing with considerable red tape, from setting
up a legal business structure, to understanding zoning laws and
licensing requirements, to acquiring various permits.
Research suggests that small business owners are potentially more frustrated by mundane red tape than by other obstacles.
The
good news is that fairly simple and affordable technological solutions
exist to digitize, consolidate, and condense into a matter of hours the
licensing and permitting requirements that can otherwise take days or
weeks of an entrepreneur’s time—time more productively spent on
developing goods and services, finding customers, and growing the
business.
To
encourage adoption of these technological solutions, the Administration
yesterday announced a package of federal, local, and nonprofit
commitments
that ensure American small business owners spend less time navigating
red tape—and more time creating jobs.
·
Startup in a Day Pledge:
The President launched a national call to action encouraging
local leaders around the country to sign onto the Startup in a Day
pledge, which has already been adopted by a eleven pioneering mayors.
·
Executive Actions: The Small Business Administration will announce a
$1.5 million competition
for seed grants to cities committed to building Startup in a Day
solutions. The SBA will also work with other agencies to develop
improved online solutions addressing the relatively few federal
requirements that small businesses typically need to navigate when
starting up.
·
New Federal-Municipal Partnership:
The National League of Cities, which represents thousands
of municipal leaders around the country, is establishing a Startup in a
Day partnership with SBA to support and coordinate this effort.
A National Call to Action in Support of Startups and Small Businesses
The
President issued a national call-to-action to America’s mayors to each
develop a local online permitting and licensing tool, following the lead
of pioneering cities including Boston, San Francisco, Salt Lake City,
and Kansas City, among others that have taken meaningful steps in this
direction.
These
solutions typically take the form of a city-based website that asks
entrepreneurs about their proposed business, generates a customized menu
of regulatory requirements, and lets them apply for all permits and
manage the application process from a single interface.
The Startup in a Day pledge:
Our
cities and communities are committed to making it easier for every
entrepreneur to start a business. We believe an entrepreneur’s time is
best spent developing innovative products and services, creating jobs,
and growing local economies—not navigating red tape. While fair zoning
rules, licenses, and permits are important to ensuring public safety and
fair competition, it shouldn’t take more
than a day for entrepreneurs to identify and begin to apply, ideally
through a single online tool, for the licenses and permits they need to
responsibly launch a business. Accordingly, we resolve to:
1.
Create a “Startup in a Day” online tool within 12 months:
We will develop within a year a website
or application that lets most entrepreneurs identify and begin to apply
within one day for all requirements to launch a business in our
respective communities.
2.
Develop a streamlined, business-friendly, online permitting system:
Our pledge is a first step in a larger
effort to streamline, simplify, and bring online those regulatory
requirements that have traditionally been fragmented across multiple
agencies and handled
through a paper-based process. Our ultimate goal is for small business
owners to be able to manage and complete most of their regulatory
obligations within a single easy-to-use online system.
3.
Share best practices:
In an effort to encourage other municipalities to join us in this
effort, we are joining
a community of practice administered by the National League of Cities,
and commit to sharing best practices, publicizing key learnings,
highlighting tangible outcomes, supporting smart regulatory
simplification, and providing visibility into our actions.
Cities Participating in the Announcement
The following cities committed to launching Startup in a Day solutions within 12 months.
1.
Boston, MA
2.
Chattanooga, TN
3.
Denver, CO
4.
Fresno, CA
5.
Kansas City, MO
6.
Nashville, TN
7.
San Francisco, CA
8.
St. Petersburg, FL
9.
Salt Lake City, UT
10.
Seattle, WA
11.
Washington, DC
Many of these cities have already made significant
progress and investment in developing online tools that let
entrepreneurs navigate and apply for startup permits and licenses in
less than a day.
For
example, new online permitting tools unveiled last year by Boston Mayor
Marty Walsh have increased on-time permit issuance by 12 percent,
shortened
the time to review and issue long-form permit by 8 business days, and
shrunk the backlog of building complaints from 3,500 to fewer than 300.
Small Business Administration Actions to Support the Startup in a Day Initiative
To
support more mayors in this effort, SBA Administrator Maria
Contreras-Sweet announced the launch of an SBA competition to fund, in
more than two-dozen
communities nationwide, the development of online tools that satisfy
the Startup in a Day pledge. The SBA also announced its commitment to
developing a federal companion tool to the digital solutions being
developed by Startup in a Day cities. The federal
tool will enable business owners to quickly identify and apply for the
relatively few federal permits and requirements needed to start the
typical small business, such as applying for an IRS Employer ID Number,
conducting a trademark search, and understanding
Occupational Safety and Health Administration (OSHA) standards.
Incentive fund.
The SBA is launching a $1.5 million competition which will by summer’s
end award $50,000 financial prizes to 25 communities around the country
committed to adopting Startup in a Day goals and online tools. An
additional $250,000 in prizes will go to consortia of local and state
governments who team up to develop tools that cover
multiple regions, or that can be easily repurposed by other localities.
The President’s 2016 budget request doubles this incentive fund, so it
can directly benefit dozens more communities.
Federal companion tool.
The SBA will also develop a companion service to the city-level
tools being developed as part of the Startup in a Day initiative. This
companion service—delivered either as a website or application that can
be integrated into city tools—will make it easy for entrepreneurs to
identify and apply within hours for the few
federal requirements (e.g. from the IRS, Department of Labor, the U.S.
Patent and Trademark Office) often required of a small business at
launch.
National League of Cities partnership
The
National League of Cities (NLC) will provide implementation support to
Startup in a Day cities, under a partnership with the Small Business
Administration.
NLC will create a platform for municipal leaders—including mayors,
chief innovation officers, permitting staff, economic development and
small business staff—to collaborate and share common challenges and
proven strategies to meeting the Startup in a Day goals.
Through its Center for City Solutions and Applied Research, NLC will
leverage its capacity to deliver high quality, effective peer-to-peer
learning, research, and best practices to help cities create a more
business-friendly ecosystem. NLC is a member-driven
resource and advocacy organization representing thousands of cities
throughout the country.
Additional background
Small
businesses are the engines of job creation and the lifeblood of our
nation’s economy. They create two of every three new jobs and employ
just
over half of the country’s private sector workforce. The Administration
has made it a priority, therefore, to eliminate undue obstacles to
small business creation. Among those obstacles is the time and energy
entrepreneurs must spend understanding and applying
for business licenses and permits. U.S. entrepreneurs spend nearly 6
days discovering, applying for, and managing licenses and permits before
opening their doors, according to a 2015 study by the World Bank Group.
User-friendly licensing and permitting are
a more powerful predictor of a state’s perceived friendliness toward
small business than its tax regime, according to a
2014 survey sponsored by the Kauffman Foundation.
