Permit Puzzles

Toledo’s small business owners have varied experiences in the startup process. While some open without much difficulty, others wait months for the go-ahead from city officials. In some cases, social media campaigns for highly anticipated ventures are underway for weeks, despite an uncertain opening date. Crowdfunding sites pop up, soliciting community help. Construction progress inspires excitement about what’s to come. Then…nothing. Social media updates fizzle. Contractors are absent from the site. Local residents wonder: what happened? 

Often, business owners are not aware of existing city regulations before starting the project, or they lack necessary capital and documentation. Miscommunication between city departments and an overwhelming number of requests can cause long delays, frustrating hopeful business owners waiting for approval. 

Differing Opinions

Michael Klein, owner and artist at Ink and Iron Tattoo Parlour (1505 Adams St.), had a positive experience when opening his business in August. “I really had no opposition from the city at all,” he said. “During the water crisis (a busy time for city government), the inspector took time out of his schedule to drive down to the shop and do a walkthrough . . . he helped me make sure that all of my proverbial ducks were in a row.”

A tattoo parlor requires a health inspection, but because it isn’t an eatery and was an antiques store just months before, it was a good place to begin his business. In Klein’s case, choosing a spot that didn’t need much renovation to bring the space up to code allowed him to open Ink and Iron within a few weeks. 

And this is essential, according to the Lucas County Health Department’s Supervisor of Food Safety Joshua Niese. He has seen countless new business owners approach the Department without plans in place, expecting to open quickly and on schedule. By law, the Health Department has 30 days to approve new plans. “I want our small businesses to succeed, because that benefits all of us,” he said. “But we also have to absolutely make certain that the public will be safe.” 

Aggie Alt, owner of future arthouse pub The Moxie (1205 Adams St.), is just four blocks from Ink and Iron, but her experience is vastly different from Klein’s. She said issues in trying to open her business have stemmed from legalities, citing a lack of communication between different agencies and inconsistent information regarding requirements as her biggest obstacles. “The Inspection Department doesn’t seem to be aware of the Health Department’s regulations or process,” she said. “It feels as though the finish line depends on who you’re talking with at what time.” 

Alt suggested a practical solution to alleviate future delays: Appointing a city ombudsman, or creating a written checklist of requirements from all necessary city agencies that could steer a prospective new business owner through the opening of a new venture. 

The agonizing process of opening the Moxie, now 14 months and counting, has left Alt feeling burnt out. “Unfortunately, I can’t say I would encourage people to open a business in Toledo,” she said.  “As the old saying goes, ‘If I knew then what I know now…’ There is so much creativity and talent in Toledo and the growth potential is here, but the cost and stumbling blocks seem to make it so only the very rich and very connected can open a business.”

Scott Biddle, vice president of Marketing and Promotions at Black Cloister Brewery, had a smoother experience. “Opening a brewery is much more involved than opening up, say, a used clothing store. We need licensing and approval from city authorities all the way up to the federal level,” Biddle explained. 

Biddle’s new venture, one of several anticipated new businesses near Fifth Third Field, has led to an experience with city officials that has been “very positive.” He also alluded to the waiting game that seems to plague many new business owners, saying, “The bureaucratic aspect of opening Black Cloister has indeed been one of our largest hurdles, in the sense of both the scrutinizing detail necessary and the duration of time elapsed while information changes hands.” While he and his team had unreasonable expectations about how soon they could open for business, it didn’t destroy morale. In fact, he viewed it as a valuable learning experience and worthwhile adventure. The brewery plans to open in February 2015 at 619 Monroe St.  

inspections and delays 

“I think it’s important for anyone thinking about opening a small business to understand that it’s not for the faint of heart,” said Ashleigh Tresso, owner of Bumble Olive Oil Company, recently relocated from Franklin Park Mall to Cricket West in West Toledo. “I found a real disconnect in how all city departments work with one another and how difficult is was to work between them all. I was told a specific step in the process would take a week to schedule, and if I’d known it was going to take the time the city told me plus two to four weeks longer, we could have been better prepared,” she explained.  As evidenced by Alt’s account above, Tresso’s experience isn’t unique.

For perspective, Toledo’s Division of Building Inspection (one of two divisions within the Department of Inspections, along with the Code Enforcement Division) is responsible for tracking roughly 45 types of permits, and on average, processes more than 15,000 permits every year. According to Sandy Spang, at-large city council member, this division has less than half the number of employees now than it did when Spang opened her own business—South Toledo’s Plate 21 coffee shop —in 2006. “They’ve gone from 36 employees to 13 since then. And now that the economy is recovering from the 2008, 2009 recession, I’m sure that they’re overwhelmed,” she said. 

Planning ahead 

Multiple business owners have expressed problems working with the City of Toledo’s Department of Inspection, and most are unaware of the role this department plays in helping new businesses get off the ground.

“We approve the plans and inspect the construction of new and renovated buildings that businesses will occupy,” Zervos said. “A number of other city agencies are also involved, which can make the process seem convoluted. We offer pre-plan review and pre-construction consultations to identify any potential hurdles, because Toledo buildings require a more creative approach to re-purposing than the newer, suburban buildings,” he explained. 

Responding to questions about hurdles encountered by prospective business owners interfacing with the Division of Building Inspection, Zervos insisted that the agency’s goal is to interact with all customers fairly, professionally and expeditiously. “The problems that businesses encounter are often from lack of preparation, for example, a design professional who has not correctly identified or has omitted details of the work to be performed. This generates a correction letter, which consumes time. A skilled design professional (an architect or engineer) can move a project along from the onset,” he said.

Spang agreed with Zervos, stating “when new business owners don’t have a lot of money, it’s to their benefit to invest in design, and in architectural drawings . . . it can save serious money later.”  

Time is money 

Shineology is a juice and smoothie shop slated to open in downtown Toledo by owner Ashima Rae, who also chose a downtown building for her new business. Like Tresso, she cited disorganization within city offices as the main reason why her doors have yet to open to the public. “In order to get to the permit stage of your project, you must have all of your equipment in place, an architect’s stamped drawings of the space and everything in it, and your plan approved by the health department,” Rae explained. “What this means is, you have a huge overhead lingering in rent, utilities, expensive equipment and accounts, while you wait for the Building Inspection Department to approve your plans.” 

Rae also stated that she encountered “major disorganization, miscommunication, staffing blunders, lost documents, requests for forms or payments that were already submitted, and total lack of concern and compassion for the small business owner.” When Rae received a letter indicating her site plan needed to be corrected, she encountered friction when the Building Inspections Department refused to speak with her and only with her architect. She estimates having spent more than $4,000 in architect fees on her 500 sq. ft. space, which she claims needed no alterations to begin with.

Shineology is still not open for business. “They have left me sitting on [thousands of dollars] of investment for over four months. I have rent, utilities and equipment to pay for and no income (from the business) to pay for it.

“There’s no one person designated to assist you through the process. Each person takes your money and checks you off their list and then leaves you hanging to figure out on your own what your next move should be. Even the people that are there to answer questions give you the wrong information. No two people in the office give you the same answer. They have pointed me in the wrong direction more than once, resulting in even more time wasted,” Rae said. Like Alt, she feels there should be a specific office or contact person who provides new business owners with organized and detailed information about the process, and what is expected.

But a solution to this problem is in the works. Along with advising small business owners to utilize the resources of the SBDC (Small Business Development Center), SBA (Small Business Administration) and SCORE (Service Corps of Retired Executives), councilmember Spang also mentioned her current project, advocating for a “small business navigator” within the Division of Economic Development. This ‘navigator’ would have a single, valuable job—to guide new entrepreneurs through the process, point them to valuable resources and advise them on how to avoid common pitfalls. 

Funding Advice

City agencies aren’t the only ones who interact with new business owners. Commercial lenders are often needed to help pave the way to open doors and ringing cash registers. Perhaps many would-be entrepreneurs are scared off by the start-up capital and collateral requirements needed to secure it. Todd Hoyt, senior vice president of Commercial Lending at Waterford Bank commented, “In time, crowdfunding will be a great vehicle to assist entrepreneurs in raising capital, but we haven’t seen a great deal of that. Bank financing with programs through the Small Business Administration is the most prevalent way of financing.” 

He cited the estimated 80 percent failure rate for new businesses in the first year of operations, which he says increases risk in this type of lending. He recommended that entrepreneurs raise plenty of capital when starting a new venture. “Owners need to be able to persevere if there is a delay in approval or some other type of unplanned event,” he insisted. To prevent being denied a loan, Hoyt said that a well-crafted business plan should be reviewed with trusted advisors—banker, accountant and attorney. “Running a successful business is not for everyone.  Look in the mirror and be honest about your skills.  Where you are lacking make sure you have those areas covered,” he concluded.

An Agency to Assist

Some of the business owners featured in this piece mentioned a desire for an ombudsman to help them navigate through the business start-up process. The Small Business Development Center (SBDC), hosted by the Toledo Chamber of Commerce, just may serve as that beacon to hopeful entrepreneurs seeking knowledge. The SBA and SCORE are two other agencies that provide assistance to small business owners. 

  “Our role at the SBDC is to provide no-cost confidential counseling and business development services to any business with under 250 employees, which is considered a small business by federal standards,” said Colleen Kardasz Campbell, International Trade Assistance Center director and SBDC program manager. 

The key is to approach the SBDC in the beginning, before you’ve invested in real estate. They offer pre-launch counseling, helping their clients compose, edit, and adjust a business plan in a way that looks favorable in the eyes of lenders. Campbell also warns that although the SBDC is an excellent resource, “There’s no silver bullet to starting a small business.” It’s hard work. It’s understanding that there’s always going to be external factors. Each business is different because each person is different. The SBDC can give you the best resources that Toledo has to offer to give you a chance of having that successful business.”

Real Solutions

Councilwoman Spang’s passion, and one of her missions on council, is to better the climate for small business in our city. “It’s why I got into city politics in the first place,” she said. Spang informed us that the city is currently in the process of moving the Division of Inspections under the umbrella of the Division of Economic Development, and that the Division of Code Enforcement—what she referred to as “the blight arm of the city offices”— will be moved to the Department of Neighborhoods. “[This move] will create greater sensitivity, and hopefully make the divisions more user-friendly,” she explained. 

For business owners, the inspectors are the only representation of the city. Inspection promotes public safety, and so it’s absolutely crucial . . . but they also have to be willing to work together with small businesses to come up with more creative solutions to problems,” Spang said. 

About the Small Business Development Center

The SBDC encourages its clients to take advantage of the programming offered through the Chamber of Commerce. They can even conduct market research for you after your business is up and running to make sure you stay relevant. All of this is free of charge.

One SBDC resource, a $10 monthly class, “Charting Your Course,” serves as a Business 101 session, guiding entrepreneurs from ideation to activation. Important topics like market development and financial information (taxes, deductions, etc.) are included. A section of the program is also dedicated to teaching would-be business owners about incentives and funding programs.

Aspiring entrepreneurs should enroll in “Charting Your Course” to see if they really did their homework. If it all checks out, they are encouraged to sign up for free, confidential counseling. It is guaranteed that none of the business ideas discussed in counseling sessions will be shared.

300 Madison Ave., Ste. 200. 419-243-8191, sba.gov.

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