28
Jan
10

How Government Hurts Small Business

By Joshua Steimle 3 Comments Categories: Government

It has been essentially two weeks since my last post on this Doba + Shopify experiment. Why no posts? Was it because I was busy setting up my website? Was I taking time to make sure I understood the services Doba and Shopify offer? Was I developing a marketing strategy? Nope, I was spending two weeks filling out forms and submitting paperwork to get a sales and use tax ID so that I can sell products legally. In other words, the most time consuming part of this process, thus far, has been government paperwork. And this in a state where the process is relatively streamlined, and in my case I already have a corporation so it wasn’t as though I was setting up an entire company or something.

Without going into too much detail, here’s how the process could have been improved:

1. Online registration. I wasn’t able to fill out the forms online. I had to submit my request on paper, faxed in. But I only figured this out after spending hours online, giving up, and calling the appropriate state government office. All forms should be online and accessible through a single business account so that you can fill out parts of forms, save your work, and return later to finish the process.

2. Online IRS accounts. In order to complete the state paperwork, I needed to have a letter from the IRS confirming the type of corporation I have. I had no idea what this letter was or where it might be (my corporation was created in 2003 and I have all sorts of boxes of paperwork all over the place and this is the first time this letter has been needed), so I talked to my CPA. He contacted the IRS, and found out that this letter is automatically generated by their computer system and mailed out when you register your corporation. Great, can you resend it? No, it can only be sent when a corporation is created. Are you kidding me? Did I go back in time to 1987? Didn’t the Internet go mainstream about 15 years ago? Why don’t have I have an online account with the IRS that I can log into and access any and all documents they’ve ever sent me?

I’m not advocating that the government get out of the business registration business…yet. But they could definitely improve the way it all works. It should have taken me all of a half hour, if that, to do what has taken two weeks.

The thing is, I think I was faster at getting this all done than most people would be. If I lost two weeks of time, I wouldn’t be surprised if the average is 4-6 weeks. Multiply that times all the other businesses created each year, and you’ve got all sorts of wasted time. How much more productive would we be as a nation if this were all streamlined? How many more jobs would exist? And this isn’t even beginning to consider the number of potential entrepreneurs who get into all this paperwork and end up deciding it’s just easier to work for someone else. Who knows how many businesses and jobs have never been created because of government paperwork?

Oh, and I haven’t actually gotten my sales and use tax ID yet, it took me this long just to get the paperwork done and sent in. Now I have to wait to see if; 1) I filled out the paperwork correctly, 2) how long it will take to process.

Related posts:

  1. Signing up for Doba…and a State Sales Tax ID
  2. Government vs. The Private Sector, Who Does Things Better?
  3. Obama’s Hand vs. Adam Smith’s Hand
  • http://www.mikesmullin.com/ Mike Smullin

    I’ve been through all this and can agree, it never ceases to amaze me how outdated our government can seem when it comes to technology. We are so much slower on the uptake than say Japan or China when it comes to these things, and it really is tragic. But the insanity is both a curse and a blessing because it also acts as an effective barrier to entry of competition. BTW, if you like Doba you might also like WorldWideBrands.com’s The Whole $ale course. Chris Malta does a great job of explaining how all this works.

  • http://www.eransworld.com Eran

    As a current local government employee this is easily explained but not easily understood by those outside of government. I don’t understand it. I don’t agree with it and I think it sucks but here it is…

    There is no incentive to be faster and or more efficient. There is no competition and there is no sharing of any kind. There is no incentive to share money, resources, talent or anything amongst agencies. We work directly with about 28 agencies from Police to fire to cities to county agencies. There are only incentives to kingdom build and create disharmony amongst each other on departmental level to agency level.

    I deal with people who don’t care, who don’t understand nor want to and/or aren’t qualified to run important systems. There are many who try and do the best job possible but they are few and far between. I could write a tell all book about the Salt Lake County Government alone.
    There are no risks and rewards for anything. You can never really get rid of the dead weight of underachievement. After a 6 months when you leave probation it is difficult to be fired for anything short of an arrest for a serious crime. Government is full of never was’s or won’t ever be’s. People who can’t hack it in the free market system.

    I can share with you one of my experiences. I have spent 4.7 years trying to convert information contained in books and books at each of the 34 workstations on our call taking floor. It is literally thousands of pages and take the information put it all into electronic format that is easy to search, sort and update and have revision control for 9-1-1 call takers.

    I have been sabotaged by every trick in the book by employees low to high including being banished, formal discipline and endless threats. I have been called every name in the book, to my face, in email, on the phone and even on Facebook. I have battled through people who can’t even use Word to create a document to people who used fear and scare tactics to create a backlash about putting data into electronic format.

    My motto over the years has become “I will succeed in spite of them”.

    The project has been mostly free. FREE….

    The software has been free open source, the server was an extra one I pieced together and the only real cost has been my time which has been less than 10% of my daily time to get this project together and it was always after my other jobs were done each day. It was done in my free time at work.

    The project finally has made some huge steps in the last 6 months and I have digitized into a wiki site more than 5000 paper documents. I have trained nearly 200 employees how to post their files, edit their posts etc. In addition to this I have created online training classes that use video, and other means to train on this and any other training need including testing and progress tracking. This is all free…

    Very few people understand the work, the struggle and fight to cut costs and increase dramatically efficiency.

    Other than my boss, the IT Manager and a few call takers I haven’t been recognized in any way shape or form for speeding up and standardizing call processing, reducing costs and inaccuracies in policy and procedure documentation. I didn’t earn employee of the month even though some have won it for cleaning out the employee fridges. I have received no thanks from Upper Management any of the Board of Operations or Board of Directors.

    Recently the Director of my center took my ideas, my project and my work to a National Convention and presented it to hundreds of other 9-1-1 call centers claiming full credit for my work. I didn’t even get a footnote in his power-point and documentation he literally stole from me.
    I have been contacted by dozens of other centers for the how what’s and whys. I am working on documentations and a blog post about this journey and how I did the impossible task.

    While it may seem like I am bitter… I am not. I shared this struggle with you to help you and others see the problem within our current government systems. I know that I did the best I could to make government faster and more efficient at an extremely low cost. I know for a fact other local agencies have spent hundreds of thousands of dollars for systems that don’t work as well. I credit my boss for helping me be a success in spite of the odds. I would say that my organization is one of the better Salt Lake Valley government agencies.

    Most in my agency don’t think about making it easier for the public to use or even that a dollar saved is a dollar we can spend doing something else that may be more important. Or even that the dollar is someone’s hard earned money.

    There are some incredible people in government but there are even more who are less than desirable.

    I find that government is trapped by rules and regulations that are inflexible and stifle creative problem solving. There are also large businesses who are too tightly embedded with contracts that make competition for services, parts and labor impossible without legislative change.

    My career in the Public sector will end on or about July 26, 2010 when my 401k is 100% vested. And I can return to where the normal world is a world chasing better, faster and cheaper, the greatness of the free market.

    And to those who think government benefits are better… its a bunch of bull…. I have worse benefits now than any where I have worked.

  • http://www.brinformation.com Mike

    Wow, great post Eran. Although I have not worked as a government employee since I was an intern with a local city department, I couldn’t agree more with the sentiment of your post.

    I do think that more people are beginning to wake up to the usurpations that are being perpetrated against the American people.