HomeMy WebLinkAboutIR 0721INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 23-0721
To the Mayor and Members of the City Council
June 6, 2023
Page 1 of 3
SUBJECT: REQUIREMENTS AND COSTS TO OPEN A SMALL BUSINESS IN
FORT WORTH
The purpose of this Informal Report is to update City Council regarding the requirements and
costs to open a small business in Fort Worth as compared to other cities.
In 2022, the Institute for Justice (IFJ) released a study of 20 large to mid -size cities that was
conducted to better understand the challenges small businesses face in opening their business
and mapped out the real -world process of starting five common business types from the
entrepreneur's perspective. The five common business types included restaurants, retail book
stores, food trucks, barbershops and home -based tutoring. In general, the report outlined that for
aspiring business owners, the actual procedures required to start a business —filing an
application, registering for taxes, passing an inspection —are not the only aspect of the regulatory
environment that affects the experience of getting up and running. Many entrepreneurs have
difficulty even knowing what those procedures are or in what order to complete them, as many of
the cities studied did a poor job of communicating requirements. Entrepreneurs interviewed for
the study indicated that they were eager to comply with their cities' rules and regulations for
starting a business but often do not even know where to start because cities fail to help them
navigate the process.
While Fort Worth was not a part of the original 20-city study, the IFJ was invited to Fort Worth to
analyze our processes compared to the original study in November 2022. In general, the IFJ
noted that the total costs to start a small business in Fort Worth were in line, and in some cases
less expensive, than other cities outlined in the study. Where Fort Worth did see challenges was
in the number of different fees required to open a small business compared to the other study
cities. The study also noted that Fort Worth lacked a true online one -stop shop where
entrepreneurs could find a consolidated set of information on how to start a business in the city.
In reviewing the comparative analysis for opening a new restaurant, there were some
assumptions made by IFJ related to required fees that were subsequently corrected by the Code
Compliance and Development Services Departments respectively. This resulted in the elimination
of three fees originally outlined in the IFJ study. The total projected fee would be $3,033.84 for
the prototypical development which is a reduction of $1216.16 in overall costs from the
assumptions of the study.
Estimated fees too en 1,000 s . ft. restaurant
LLC Certificate of Organization (Form 205): $300.00
Electrical Standalone Permit: $76.47
Assumed Name Certificate (Form 503): $25.00
Kitchen Hood Permit: $200.00
Register with TDLR Architectural Barriers: S175.00
COFW Consumer Health (Code) Plan Review: $150.00
Mechanical Standalone Permit: $43.00
Certificate of Occupancy: $43.00
Commercial Remodel Building Permit: $1,300.06
Sign Permit: $48.00 min., needspecifics for actual cost
Plumbing Backflow Standalone Permit: $74.31
COFW Consumer Health (Code) Annual Health Permit:
$325.00 ($285 + $5 per employee (8 * $5 = $40))
Plumbing Standalone Permit: $43.00
Department of State Health Services Food Safety
Manager Certification: $85.00
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 23-0721
p�T�A4
Grp 4
i {
i7 Y
rF rn
1075
To the Mayor and Members of the City Council
June 6, 2023
Page 2 of 3
SUBJECT: REQUIREMENTS AND COSTS TO OPEN A SMALL BUSINESS IN
FORT WORTH
Grease Trap Interceptor Discharge Permit: $136.00 Department of State Health Services Food Handler
Card: $10 per food handler (typically paid by employee,
valid for 2 ears)
An outline of how Fort Worth compares to other similar -sized cites is shown in the two charts
below.
Total Cost to Open a Small Business
Seattle
San Antonio -
Raleigh _
Phoenix -
Minneapolis
For: Worth -
$- $2,000 $4,000 $6,000 58,000 $10,000 512,000 $14,000 $16,000
Total Number of Fees to Open a Small Business
20
18
16
14
12
10
8
6
4
2
0
Fort Worth Minneapolis Phoenix Raleigh San Antonio Se'
The Development Services Department will benchmark those processes outlined in the study and
review the overall development fees related to small businesses in FY2024 as part of the biennial
fee review.
In seeking to address the issue of our online presence, the Economic Development Department
worked with Development Services and IT Solutions to build out a more robust one -stop online
resource to help alleviate some of the confusion entrepreneurs may have about starting a
business in Fort Worth. This site, located at https://www.fortworthtexas.gov/business,
consolidated all small business steps (county, state, federal and other local resources) that were
spread out across multiple agencies and includes information on creating a business plan,
registering your business, applying for permits and inspections as well as a number of other
informational sections to outline how to open a business.
With regard to development steps, the City has produced both a Comprehensive Commercial
Development Guide as well as a Restaurant Development Guide for business specific guidance.
Further, the City continues to make improvements in our Permitting Videos Library which walks
applicants through video tutorials on how to apply for permits through our online permitting
system, our web -based CFW Permit Assist tool, which provides online project scoping and fee
information at a project -specific level, and our Development 101 Training Series where the vision
is to train potential developers and business owners on the various steps of the development
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 23-0721
To the Mayor and Members of the City Council
June 6, 2023
Page 3 of 3
SUBJECT: REQUIREMENTS AND COSTS TO OPEN A SMALL BUSINESS IN
FORT WORTH
process. The departments will continue to seek feedback from the Small Business Task Force to
ensure that the new site is meeting the needs of our growing entrepreneurial base.
For further questions, please contact Robert Sturns, Director of Economic Development, at 817-
392-2663 or D.J. Harrell, Director of Development Services, at 917-392-8032.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS