Institute evaluates barriers to Fort Worth’s small businesses

Published on November 17, 2022

The Institute for Justice, a nonprofit public interest law firm, is shining a light on the challenges faced by the City of Fort Worth’s business permitting processes.

The City of Fort Worth has conducted several internal assessments to help better streamline licensing and permit processes and communicate those processes more effectively to the public. The City has already made strides in this area with the unprecedented move to grow the Development Services Department by 40 new positions during the fiscal year that began in October.

In addition, the City has been looking to consolidate several development-related functions housed in other departments. The goal is to help centralize processes and sharpen the focus on customer service.

As part of the City’s continued commitment to promote innovation and entrepreneurship, the organization is working with the Institute for Justice to remove barriers to business.

This work is an extension of the Institute for Justice’s Barriers to Business study released earlier this year, which looked at barriers to starting small businesses in 20 cities across the country.

The study models five common business types that are somewhat standard in most cities – a restaurant, a retail store, a barbershop, a food truck, and home-based tutoring services – with the ultimate goal of developing process and policy recommendations to make it easier and more equitable to start small businesses in each city.

The Institute for Justice study was originally initiated by HSC Innovates, a division of the University of North Texas Health Science Center that’s focused on innovation ecosystems and small business. The Institute of Justice agreed to review Fort Worth at no cost to the City, thanks to support from the Kauffman Foundation.

Initial findings

Jennifer McDonald from the Institute for Justice made several presentations to both the public and City staff on the organization’s findings this week as part of Global Entrepreneurship Week North Texas.

The report takes the perspective of an entrepreneur specifically looking at the steps and requirements needed to start a restaurant in Fort Worth. Fort Worth’s results were then compared against several other national benchmark cities from the Barriers for Business study – Minneapolis, Phoenix, Raleigh, San Antonio and Seattle.

A few of the key takeaways:

• Lower cost: Compared to the national benchmark cities, Fort Worth was about $1,000 less expensive to start a restaurant, costing about $4,250 across 21 fees. (According to the Barriers to Business study, the national cost is about $5,300 spread across 13 fees.)
• Higher number of fees and forms: According to the report, the City of Fort Worth also requires 21 different fees to start a restaurant – more fees than the average city – and 18 forms to be completed, some with replicating information, which can be costly, frustrating and time-consuming to small-business owners. The report does not provide specific breakdowns for how many of these fees and forms are required by the City, versus those required by other local government entities like the county and the state.
• Average complexity: The Institute for Justice found that 63 steps were required to complete the process to start a restaurant, including several activities that had to take place in-person. While this number is typical in other cities across the nation, it comes with the caveat that small-business owners who were interviewed for the report collectively feel like they do not receive consistent levels of service, answers or information depending on who they speak with at the City.

A high-level summary of the report is available online.

Next steps

The City will validate the report’s findings in the coming weeks, recommending any corrections or clarifications that may be appropriate. The City Council will be briefed on these findings and recommendations early next year.

From there, the City will work with the Institute for Justice, the Small Business Task Force, the Development Advisory Committee and other stakeholders in the small-business community to explore ways to incorporate the study’s recommendations into the broad strategies already put in place around permits, licensing and zoning, such as the streamlined, bilingual zoning forms, the City’s Permit Assist Tool, and other small-business resources that have already begun rolling out to the public.

More information and timelines about the implementations of these recommendations will be shared through City News as they become available.

Photo: A new report examines the steps and requirements needed to start a restaurant in Fort Worth.

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