Samantha Bailey-Champagnie has worked in finance for years and is also the treasurer for two-non profit agencies, making her well equipped to co-manage a small franchise. But even an experienced, finance sector veteran like her has difficulty navigating the city’s web of bureaucracy and regulation. And getting stuck in that web can cost – in Bailey-Champagnie’s case $10,000.
She and her colleagues received a $10,000 penalty when city inspectors saw some oil at their business that had not been properly disposed of. Though the oil was gone on the follow-up inspection, the fine hasn’t been waived. Small business owners say it’s situations like this that make it costly and difficult to thrive in an already expensive city.
As government looks toward small businesses to help decrease the unemployment rate and ramp up economic growth, owners, like Bailey-Champagnie, are being slammed with exorbitant fines making it difficult for some businesses to just keep their doors open, let alone hire.
“There are tons of regulations in New York and sometimes violations with small businesses, that occur, it’s not because they’re planning on it, some of it is just unawareness and unintentional,” says Bailey-Champagnie who spoke at a small business forum at LaGuardia Community College.
Rob Mackay with the Queens Economic Development Corporation also says that part of the problem is lack of awareness that is often terminal to fledgling businesses.
“A lot of times there are city rules that people don’t know about and or they’re not aware of,” he says “I always hear about someone starts a restaurant and someone comes from the Department of health comes in and finds seventeen things wrong and the next thing you know they’re fined or closed for a day.”
Brian Gurski, a business counselor in Queens who was also a panelist at the small business forum in Queens, said he heard stories like Bailey-Champagnie’s before and that those stories get at a larger issue – a better way of keeping small business owners informed.
“I think it speaks to the importance of education and outreach,” he says.
The city has already ramped up its efforts to better support small businesses in an effort to bolster job creation with its Business Solution Centers which offer comprehensive support to entrepreneurs and existing owners as well as numerous business incubators and affordable work spaces. Services range from technical assistance to recruitment and training.
Popular tools like the requirement wizard on the NYC Business Express web page can list, in about ten minutes, all the permits requirement and costs associated with starting any number of businesses but the service is not well advertised.
Jonathan Bowles, executive director at the Center for an Urban Future, said he thinks the Bloomberg administration has done a great job of providing services but that there is room for improvement.
“I think they’re really trying but I think these regulatory agencies like you’re saying, are really having an adverse effect,” he says.
Other owners like Tom Patilis, who has run a coffee shop in The Bronx, originally owned by his father, says that if you want to operate in New York City hefty penalties and costs and are to be expected.
“You can’t really complain about things like that, you know. This is also coming from a person that has been in business for a long time, you learn to deal with these things, you learn to expect these things,” says Patilis.
He says that, while the red-tape is cumbersome, consumers also have to be protected and the city has to do the tricky job of supporting business but protecting the public as well.
“I think the city’s been doing a good job,” he said “There are times when you don’t really agree with what they do but you know that they’re there to protect the public and I could appreciate that,”
Bailey-Champagnie says that she was more concerned about the difficulty she and her colleagues encountered with the city’s Department of Sanitation when it came to discussing why the fine wasn’t waived. They hired an attorney after unsuccessful attempts to resolve the problem.
“The doors seem shut and the dialogue just doesn’t happen as it should so that people can come to an understanding,” says Bailey-Champagnie.
The New York City Department of Sanitation was unable to give a comment regarding the appeals process.
Gurski says that fines like this are less punitive and more destructive in a city where the unemployment rate jumped between December and January by .2 percent
According to the SBA small businesses account for 99 percent of of all employers and 51.7 percent of the private-sector jobs in the entire state of New York.
And while the number of opening establishments in 2010 was greater than the number of closing establishments in the state, for small owners like Bailey-Champagnie, running business the business day-to-day is made even more complicated by all the red tape.
“Some of these penalties are incredibly stiff and make it difficult for owners to operate.”