Last updated: January 14, 2022

How Local Governments Can Overcome the Challenges of Business Licensing

The myriad elements that go into business licensing are often time and labor-intensive for municipalities, particularly if they’re being handled through paper or rudimentary digital processes.
Posted by Cole Zercoe
Challenges of BL

Business licensing can be a complex task for local governments, given the wide range of requirements, processes and potential collaboration between departments depending on the nature of the business.

From restaurants to contractors to wellness spas, the myriad elements that go into licensing a business – whether it’s meeting deadlines or ensuring businesses are in compliance – are often time and labor-intensive, particularly if the licensing is being handled through paper or rudimentary digital processes like email.

Here are some examples of the challenges local governments face with business licensing, and how to overcome the obstacles.

How Municipalities Struggle with Business Licensing

Given the specific licensing requirements vary from industry to industry, there are numerous examples of the types of bottlenecks that can crop up. A manual licensing process is naturally more time-consuming for a number of reasons – from the burden of data entry to tracking down paperwork that isn’t held in one consolidated platform. Some potential issues that municipalities using this type of system can run into are:

Missing Items

Manual processes present the potential for more back-and-forth between a local government and a business than is necessary, such as if staff discover during the application review that the business is missing required components. For example, if a business operates work vehicles and the municipality needs driver’s licenses on file for each of the drivers, if those items are found to be absent in the initial application, then the jurisdiction has incurred the labor cost of reviewing the application only to send it back.

Industry-Specific Requirements

Businesses in a community need different types of licenses based on the industry, which means a broad range of documentation. Health inspections or certificates may be required for a massage therapist in a jurisdiction, while a contractor may need to provide their general contractor license with the state in order to get a local contractor license. These variations can cause headaches for both the applicant and the municipality and increase the potential for error in the application process.

Tracking Compliance

Ensuring that businesses are complying with the various stipulations of their license can be a resource-intensive challenge for municipalities, which potentially miss out on revenue or put public safety at risk if businesses are delinquent and not held accountable.

Applications and Renewals

Given the continuous cycle of applications and renewals, a cumbersome manual process makes it harder for businesses and municipalities alike to move through the steps, including the time spent physically printing and mailing out the licenses and renewals.


(Application Renewal Reminders in GovOS Business Action Center)

Department Collaboration

It is often the case that multiple departments need to be involved in the approval process. Working together could mean finance determining that the applicant doesn’t have any outstanding issues with taxes or other monetary items, or the planning department confirming that the use of the location for the specific business purpose is allowed. The traditional way of doing this through paper or email methods can be slow-moving and unorganized.

How Local Government Can Streamline Business Licensing

Moving the process of business licensing into software capable of managing all of the disparate documents and requirements in one consolidated platform can save municipalities time and money through increased efficiency.

A software solution can manage the various industry-specific license requirements, walk businesses through each step to ensure an application isn’t being sent with missing components, enable departments to more effectively and quickly collaborate on license approval, track business compliance, and send digital licenses and renewals to a business directly without the need for physical mailing.

With more streamlined operations that make it easier for businesses to submit and comply with licenses and for municipalities to manage those licenses, cities can better prevent backlogs, increase accountability and transparency, and boost revenue.

Why GovOS is the Comprehensive Municipal Business License Software Solution

GovOS, a comprehensive platform for local government, can help your jurisdiction get businesses licensed without headaches through customizable, automated solutions for complex processes like registration, renewal and payment.

Learn more about how GovOS helps cities manage licensing quickly and easily, as well how the platform streamlines other tasks like tax collection, citizen complaints, and community engagement, here.

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