FURTHER READING click the title:
Challenges and Solutions Sought at the California Economic Summit.
Is getting a business ready for an inspector in California like setting up a bedroom for a fost-adopt child?
A first step in getting a business up and running in California means getting a visit from people who will give you the green light and say your business is approved to operate. That's not always an easy hurdle to clear.
This made me think back to when my wife and I became foster parents in 1989. We had to have the room prepared including the crib in place and our little house needed a new heater.
Fortunately, we had a co-op to access and the process didn't cost us much money.
For a business owner who's installing tables, chairs, pipes, equipment, restrooms and more this preparation period could cost several hundred thousand dollars.
The relevance of this issue struck me as I covered the California Economic Summit held in downtown Los Angeles on November 7 and 8th. See the sidebar to click on the articles on my LA Business News Examiner page.
I initially wondered how the gathering of 400 people could relate to men and women running small businesses in California.
Issues became apparent during a morning panel when Mike Niggli of San Diego Gas and Electric told about the challenges his company faced during a transmission line project. It took 5 years to get through the permit process.
Licensing Delays Cash Flow
Earlier in 2013, I interviewed the small business owner of a microbrewery in Vista, north San Diego County, and he said a friend of his was going to start a microbrewery in Orange County. The licensing process took so long his friend went bankrupt.
He had to pay for all the equipment to be in place and have the operation ready as though customers could start walking through the door.
A lengthy licensing process forces entrepreneurs in capital-intense businesses to invest way before cash flow starts rolling in. This pushes the break even point farther to the future and can dampen the dreams of many would-be small business owners who would otherwise be in a position to hire.
Mike Niggli told me the initial investment becomes "risk money" and he said licensing in the state is broken.
Local Improvements Needed?
Kish Rajan of GO-Biz, the Governor's Office of Business and Economic Development told me cities and counties need to improve licensing and other problems. "We at Go-Biz are in the process of regulatory modernization."
He was a council member in Walnut Creek and said, "Cities need to improve their process and collaborate with their neighbors."
Licensing is definitely a hurdle to clear when starting a business in California. I'd like to hear from companies who have had both positive and negative experiences with licensing. I'd like to hear thoughts on how the process can be improved.
I'll send the comments on to the GO-Biz office as one way to participate in the spirit of the California Economic Summit.