Rick Caruso for Mayor &ndash Official Campaign Website
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Make LA Work for Small Business

Problem: Covid laid bare just how deeply small businesses could be impacted by government decisions. At the same time, many who lost their jobs turned to entrepreneurship to be able to control their own economic future. City Hall too often makes starting a business an expensive endeavor mired in a maze of bureaucracy. Los Angeles should be a place that rolls out the red carpet for businesses of all sizes, and makes it easy to not just start, but grow dreams. 

Data

Decline in small businesses

  • Los Angeles City Office of Finance listed 28,020 new business starts in 2021, a 14% decrease from the prior year and a 20% decrease from 34,831 new businesses in 2019 Declining number of new business registrations can be attributed to red tape and high cost of living. Steep regulatory fees and taxes pose challenges for the City. 
  • A Yelp September 2020 report listed Los Angeles as the US city with the most permanent and temporary business closures up to that point in the pandemic (15,000) Women and minority-owned businesses were the most vulnerable due to a lack of immediately available capital and lack of substantial relationships with banks. 

Small business is vital to economy, and there is room for equitable improvement

  • Los Angeles has more than 250,000 local small businesses and nearly 1.1 million sole proprietors. These businesses account for 43% of the local workforce
    • Latino and Black residents own 11% and 2% of small businesses, though they represent 49% and 8% of Los Angeles County’s population, respectively

Policy Agenda

Issue

Small businesses face a complicated web of bureaucracy when trying to start, grow or modernize their business.

Solution

Centralize Support for Small Business 

  • Streamline City regulations to assist business growth and lead a coordinated effort to bring together the various public and nonprofit organizations that provide support (capital, tech, marketing, legal, etc.) to businesses. Utilize the Office of Finance and their data to reach more businesses to organize and provide support.
  • Provide easy to access information on yearly tax information about resources, including loans, financial education and other city services.
  • Recalibrate the City’s Business Processes & Fix Department Bottlenecks: The hurdles to opening a business are often found in interactions with City Planning, LADBS, LAFD, BOE and LADWP, whose processes are often opaque and contradictory. Change the culture at City Hall by getting departments to work together towards a common vision of supporting small businesses.

Issue

Procurement is done in piecemeal fashion

Solution

Create a City-Wide Procurement Office 

  • Los Angeles appointed the first ever Chief Procurement Officer (Feb 2018) and now the city must empower that role and make it functional with a permanent city-wide procurement office with staff and funding to bring greater transparency, strategy, and accountability to this critical function of government. Out of the nation’s top ten cities, L.A. is the only one without a citywide procurement office.
  • Work with the Chief Procurement Office to break up large city contracts into smaller and more specific contracts so more businesses can apply and have access to opportunity. 
  • Work with Chief Procurement Office to bring new businesses online to the city’s platform to be notified about contracting opportunities as soon as they are available. 

Issue

Not all entrepreneurs can access funding. Sidewalk food vendors are an important part of Los Angeles’ food scene but are left out of the formal economy due to extensive and expensive government requirements. It is estimated that only 204 of the approximately 10,000 vendors in LA have received permits due to stringent LA County Public Health requirements. 

Solution

Microloans to increase economic participation

  • Every year the city receives a Community Development Block Grant (CDBG) allocation from the federal government and these funds can be used to support economic development. 
  • Establish a program that creates microloans for vendors to buy carts. The program would be developed in partnership with vendors and community-based organizations that can provide technical assistance. 

Issue

Small businesses feel like they have no say in city government. 

Solution

A Caruso Administration will propose a Small Business Bill of Rights, to include: 

  • Small businesses will always be at the table when decisions are made that impact their operations. 
  • Small businesses should expect a timely consideration of permit and licenses 
  • Small businesses should be able to get off the ground and open without needing to hire lobbyists 
  • Small businesses will be considered when city policy is being developed and economic analysis of impacts will be done to inform policy decisions.
  • Small businesses can rely on the city for a clean and safe place to do business.

1 https://xtown.la/2022/03/15/los-angeles-economic-recovery-covid/
2 https://spectrumnews1.com/ca/la-west/inside-the-issues/2021/02/05/-los-angeles-suffers-most-small-businesses-l osses-during-pandemic
3 https://calmatters.org/commentary/my-turn/2021/02/how-to-build-a-more-inclusive-l-a-county-through-small-businesses/
4 https://lacontroller.org/audits-and-reports/real-estate-asset-management/

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