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Scot Ferraro, Director, Wolters Kluwer’s CT Corporation [FWB:WOSB]A national phone carrier ran into a big problem as it opened a slew of storefronts in shopping centers across the country.
Too many times, with opening dates set, the shops couldn’t throw open the doors as scheduled for one simple reason: The company didn’t have the proper business licenses in place.
The delay to launch the stores, otherwise ready for business, frustrated the company’s C-suite and ultimately impacted its bottom line. Across the retail industry, the same story regularly plays out for several reasons.
Permit and license requirements—and the time it takes for officials to approve the paperwork—vary widely from city to city and state to state. What’s more, the complexity of those requirements differs based on how regulated an industry is. It will typically take more steps to secure a liquor license to serve drinks at a new restaurant as compared to the general business licenses required to open a clothing boutique.
Consider the task of securing a fire alarm permit for a new business. In Orlando, it may take a couple of weeks. In Redmond, Washington, it could take three days to four weeks, depending on the complexity.
Or what about a business license? In Sacramento County, California, it takes two to three weeks for officials to review and approve a general business license.
In Atlanta, there are several steps to securing a license. Business owners get a temporary license when they visit city offices, fill out a new business tax application and pay the required fees. Once a bill (based on their business’ estimated revenue and number of employees) is paid, it takes another week before the permanent business license arrives in the mail.
"One way to ensure that communications on licensing and permitting are fluid, is to centralize all activity in one department"
Another obstacle for many businesses is the lack of a centralized compliance system.
While some businesses have an entire team dedicated to compliance, many push licensing and permitting to local or regional employees, sometimes in the accounting or human resources departments, with little to no company wide oversight.
When nobody is in charge, businesses end up being reactive, not proactive. They lurch from one business requirement to the next as they learn about them on the fly, instead of knocking out a carefully mapped plan to ensure all the paperwork is filed in an orderly fashion.
What’s more, communication breakdowns between the person or team in charge of compliance and a business management or marketing department can lead to opening day delays.
For example, if an opening date is set for Nov. 1 but compliance (or whoever responsible for licenses) is not in the loop, delays in securing permits will occur. Similarly, once permits are in the works, management and marketing should know projected timelines for securing each so that strategic plans— such as for new store openings—can be made.
Depending on the licenses and permits required, communications oversights can delay store openings for weeks to months, costing a business time, money and potential customers. But there are ways to ensure your business launches on time.
Here are five tips to make sure your business has the right business licenses and permits in hand before opening day:
1. Conduct a proactive audit of how permits and licenses are handled by your company: Map out everyone in your organization whose job it is to handle everything from liquor licenses to fire alarm permits; be as comprehensive as possible.
2. Centralize compliance operations: One way to ensure that communications on licensing and permitting are fluid is to centralize all activity in one department. Two common scenarios are centralizing with either legal or accounting. While this department will need to rely upon regional employees to do some of the heavy lifting (e.g., visiting local government offices to secure information when needed), for the most part the work is coordinated by a central authority.
3. If centralizing isn’t possible, take steps to boost communication among those responsible for licensing and permitting: If responsibility for this work is spread across your organization, your licensing and permitting team should be a cross-department, interdisciplinary group tasked with building a system to maintain communication among stakeholders. Any system should trigger notifications on licensing and permitting requirements as well as provide timelines for each. If your license portfolio is complex, consider hiring a third party to help build and administer a solution for your organization as well as alert you to new license and permit requirements as they come up.
4. Based on the results of your audit, create a master compliance calendar: Such a calendar will map the licensing and permitting requirements you currently have, including deadlines for securing renewals, as well as detail the deadlines and requirements for the locations where you plan to open in the future. To help automate the process, a third-party solution can be leveraged to manage renewal dates.
5. Make sure the permitting is considered first. There is nothing more frustrating than having a location built out, marketed and customer-ready but delayed for weeks by the technicality of a licensing hiccup.
While permitting and licensing may seem ancillary, it fast becomes a core business function when not handled properly. Be sure that these issues are considered fully before plans are made for new openings.
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