Removing barriers for small business
Back
| Next Article |
Local councils play a significant role in supporting and influencing how businesses in their regions start and grow.
Small businesses are the backbone of any region and make a vital contribution to the social and economic prosperity of communities, by creating employment, providing essential goods and services, and making local government areas attractive places to live and visit.
In 2021, Mackay Regional Council signed up to the Small Business Friendly Charter (SBFC) and made a commitment to help simplify and streamline the dealings of small businesses with Council. The end goal was to simplify administration and regulation (red tape), or reduce ‘red tape’ (regulation, processes) associated with Council engagement.
LGAQ’s Lead Trade & Investment, Paul Cranch explains the SBFC initiatives about recognising and encouraging councils to develop processes that attract and enable small business operations within their community, while also collaborating with other councils.
“Becoming small business friendly is about joining a community of like-minded councils to inspire each other with ideas, motivate each other with successes, and attract vibrant and prosperous businesses into their regions by making it easier to do business through faster decision making, fast or on time payments, simplified administration, access to clear information and greater certainty.”
“I applaud the initiative of Mackay Regional Council for taking this a step further by teaming up with Peak and really exploring how as council they can make a difference to their business community through cutting ‘red tape’ and I look forward to seeing more councils head down this path”.
Red tape is often critical to achieving the appropriate balance between social, economic, and environmental policy objectives. However, when red tape is so complex, inefficient, unnecessary or time consuming, it can impose significant financial and time costs on small and medium size businesses which limit the viability of new and existing business operations. When red tape produces no significant benefit, it can seem ‘too hard’ for new businesses to start, or existing businesses to expand.
Council commissioned Peak to undertake a red tape reduction initiative with the bold goal to make doing business in Mackay easier for small business owners, as well as attracting new small business entrants to the region, through the simplification of processes and a reduction of ‘red tape’ at Council.
To define what cutting ‘red tape’ could look like in reality, we looked at other studies undertaken in the context of Local Government and identified five main categories. These categories were then used to assess each of the in-scope processes.
| Category | COMMUNICATION AND ENGAGEMENT | DATA REQUESTS | POOR COORDINATION | TIME DELAYS | COMPLEXITY |
|---|---|---|---|---|---|
| RED TAPE | Lack of clarity and certainty over the process in a language that is very regulator focused | The collection of unnecessary data or requesting data that is already being collected elsewhere | Lack of inter-department or internal coordinationcausing duplication or inconsistent requirements | Excessive time waiting for a decision or uncertainty of response timeframes | The extent of compliance requirements imposed on businesses and the community |
| IMPACT | Information is not clear and hard to find which results in businesses being unaware of requirements and potentially not proceeding with a business. | Unnecessary requests for data, causing businesses extra time gathering information. | The process is not clear or simple to follow which makes it confusing for business owners to follow the process efficiently. | The time / effort required to fulfill requirements may seem unattainable to businesses owners, and/or they may not have time to wait for a decision. | Confusing compliance process causing uncertainty for new and existing businesses. |
Walking in the shoes of a small business
Our methodology for this assignment was based on two main parts.
The first part was a ‘secret shopper’ scenario approach. This is an observational research methodology with the aim to go through service interactions, as a normal customer would, to understand what the customer is experiencing. Our ‘analyst’ had limited prior understanding of the processes to ensure they were “walking in someone else’s shoes” from a small business stakeholder perspective.
The second part was to look at other councils’ processes for the same scenarios, to build a picture of what best practice could look like. To do this we looked at both Queensland councils, as well as Councils in the UK. The focus of this part was to look at what other councils do well and how that can be adapted to Mackay. To be able to compare Mackay’s regulatory process to how other leading councils do conduct their activities, we carried out the secret shopper style process with three other councils for each of the scenarios.
These case studies gave us a baseline to be able to make comparisons against and have examples of where councils have executed the same regulation with a different effect. Focusing on comparison provides real life demonstrations of where improvements can be made and initiates a conversation to develop collaboration by providing a joint understanding of what best practice could look like.
At the outset, we agreed with the Project lead David McKendry, Executive Officer MRC and the Project working group, which was made up of representatives from all areas of Council, on the scope of the initiative. For each of the agreed small business types below we agreed on a scenario for us to test. This was sometimes as simple as “Rebecca has a local pineapple and mango orchard in Mackay and generally sells to wholesalers. Rebecca would like to start selling their fruit at the local Saturday market” through to more complex mobile coffee vans with hot food scenarios.
The small business scenarios we tested:
- R1: Home based - Hair and Beauty
- R2: Closed food business
- R3: Home based - Food Production
- R4: Mobile - Coffee
- R5: Mobile - Market Fruit & Veg
- R6: Takeaway Coffee
- R7: Bed and Breakfast
- R7: Bed and Breakfast with food
- R8: Busking
Taking a customer centric perspective
Without the direct knowledge of Council processes, Peak progressed the two-part application under synonyms to commence business from the vantage of the eight small business category types within the scope of service areas with the aim to provide an assessment of the complexity of the process, how customer friendly it was, any issues we found and general feedback on the experience.
Our team had no prior understanding or knowledge of each of the regulatory areas and was experiencing the process for the first time with each of the councils engaged.
At the end of the process, we had a permit to busk on the main street in Mackay through to operating a B&B.
Reducing red tape is a long-term journey that requires a shift in culture to ensure its at the heart of how a Council interacts with its community.
Setting up a small business for the first time can be daunting, and the level of information and ‘regulation’ can be confronting. In some of our scenarios, if we had been a member of the public, we would have just given up (home food production) or gone ahead without making an application (B&B) and in some cases, we applied for a license when one was not needed.
What we learned as a ‘secret shopper’ is that getting the basics right and being consistent is critical to businesses finding the correct information and completing the right application. We also learned that the internal processes of council create a multi-faceted procedure that requires multiple departments within council to work closely together to find opportunities to reduce ‘red tape’
Opportunities for council to reduce red tape includes:
- Making it easy to initiate the process and to make an application.
The level of pre-requisites we encountered was extensive. Assess the purpose and level of burden your data requests impose, and limit extensive and complex additional documents required for the Initial Assessment - Reducing complexity, unstructured information and simplifying the message.
Simple use of fact sheets, forms and dedicated web pages can help to provide clear and concise information required for businesses. The best cast studies we found made the process simple and clear to understand. Information overload is as bad as too little information. - Have a consistent online process-driven framework that spans all processes.
Use online forms (not PDF’s that are required to be printed) or link to a customer portal to simplify data requests. - Drive change – form a ‘Red Tape Reduction Team’ to identify, challenge and have the authority to remove red tape and to make the information and process customer centric to help improve integration between internal departments that are involved in the process.
- Improve online resources to help inform and support businesses in relation to their regulatory requirements.
It’s important to clearly explain the process and define what businesses need to apply for an application and what businesses don’t. - Improve access to relevant training programs to upskill new business owners. These could be offered as part of your community engagement program through the Library or a subsidised program through a local business.
- Consider the tone and set the sentiment of your messaging
Ensure the language used on the council website is business-friendly and simple to understand. Have a third party read the content to consider whether it feels helpful or difficult and too focused on compliance, which can be confusing. - Remove requirements where sensible and remove unnecessary or out-of-date requirements.
- Adopt a risk-based approach so low risk activities have less compliance.
- Remove unnecessary fees where cost and time of processing is burdensome on council and/or the customer.
There are numerous ways to reduce red tape and improve opportunities for residents to start locally based businesses. It takes some time and is a collaborative effort, but it can be done. Consider talking to your local businesses or put a call-out to potential new business owners to see how you can work with them to streamline the process. In turn, you’ll increase community engagement, provide opportunities for locals to create their own jobs and potentially employ others, and create smoother, more time-efficient processes within council.
About the author
Mike oversees the Performance and Strategy team at Peak Services and works with clients on specialist assignments. Mike has extensive experience in improving service delivery and delivering business change.
Mike's key experience includes:
- Management of the merger of 5 of the LGAQ's commercial enterprises into one new company under one management structure (Peak Services Pty Ltd).
- Set up and transitioned over 140 council staff into a new centralised Shared Services arrangement with Mackay Regional Council including consolidating 4 front counters.
- Re-designed and implemented a new operating model to develop integrated and crossed skilled functional teams, unlocking significant cost reductions for Mackay Regional Council.
- Completed detailed functional assessments and services reviews for Livingstone Shire Council post de-amalgamation.
- Completed a strategic review for Central Highlands Regional Council to identify potential efficiencies within their administrative and transactional operations.
- 10 years’ consultancy experience in the UK delivering organisational change and service transformation programs for the public sector, including:
- The design and delivery of the first Legal Shared Services department between London Councils.
- Feasibility and detailed specification development for the creation of a new single non-emergency number for London.
- Organisational re-design of transactional services for the National Health Services (NHS) including the consolidation of Procurement, Finance and IT functions of 14 trusts into one shared service.