As many entrepreneurs know, starting a business can be tough, but maintaining one is even tougher. Nearly half of businesses fail within the first five years. Now, throw in a global pandemic that saw historic economic disruptions and shutdowns to businesses and one would expect that the percentage of failed businesses would skyrocket.
However, despite the challenges brought on in 2020, more than 70% of small and medium-sized businesses survived the pandemic by taking their operations online. It’s clear. Going digital is no longer a nice-to-have feature of a business to help attract more customers. In many cases, it’s a need-to-have in order to survive a rapidly changing economy, regulatory space, and consumer landscape.
Businesses are part of the lifeblood of communities and local government leaders can help ensure business owners have the resources they need to succeed—which includes digital tools for business licensing, tax collection, and communication.
In our latest report, we shed light on how business owners feel about the online services provided by local governments and ways to improve the evolving relationship. Here are six findings from the report that will impact the relationship between businesses and local governments in the year ahead.
Uncovering the Business Owner Experience with Local Government
1. Can your business license application be completed online?
With so many businesses surviving the pandemic by going online, it might be a surprise to learn that nearly a quarter of all surveyed businesses could not complete any part of their business license application online. In fact, only a third of business owners managed to complete the entire process online.
This underscores the need for more streamlined and digital-first application processes. For businesses, being able to complete the entire licensing process online means less time and resources spent on navigating bureaucratic processes, enabling them to focus more on growth and operations. For local governments, streamlining these processes can lead to increased compliance, better business engagement, and a more vibrant local economy.
2. Is your license renewal process slowing down business?
When it comes to renewing business licenses, it helps to have a process that is fast, streamlined, and intuitive. However, less than 50% of business owners reported being able to renew their business licenses online. This lack of digital renewal options can lead to inefficiencies and unnecessary administrative burdens for businesses. And that’s not all. The GovOS report found that 47% of business owners pay their renewal fees either in person or via mail–not online.
Not providing the ability to pay business license fees online can lead to missed revenue and wasted resources. Improving online renewal processes is crucial for facilitating smoother operations for existing businesses. The local governments that prioritize this can expect better compliance rates and a more dynamic business environment.
3. Is your tax filing experience painful for business owners?
Taxes are a tedious, yet unavoidable, part of running a business. It’s critical that local governments make this process as easy as possible for the businesses operating in their jurisdictions. However, as the survey uncovered, there are several opportunities for improvement in this area. Over 31% of surveyed business owners reported difficulties in filing taxes with their local government.
This calls for a more streamlined and intuitive tax filing system. For businesses, especially small and medium-sized enterprises, simplifying the tax filing process means less time spent on compliance and more on core business activities. Your local government benefits by reducing the instances of non-compliance and fostering a more positive relationship with the business community.
Ready to see business licensing software in action?
4. Is your online tax portal in need of a makeover?
On the topic of improving the tax filing process, an overwhelming 64% of business owners believe that their local government’s online tax portal needs improvement. Enhancing your tax portal can greatly simplify the tax process for businesses, reducing errors and compliance issues.
Upgrading to a solution that simplifies the tax collection process through more intuitive portals ultimately means more efficient revenue collection and a higher degree of taxpayer satisfaction, contributing to a more transparent and accountable tax system.
5. Do business owners know where to find critical information?
It’s important to note that even if your agency has effective and easy-to-use business licensing and tax collection systems, if you’re not actively communicating about these tools to business owners, they won’t know they exist. Around 25% of business owners reported being unsure about where to find licensing and tax information on government websites.
This highlights the importance of having transparent, easily accessible information. For businesses, readily available information can drastically reduce the time and effort spent in understanding and complying with regulations. Business owners want their local governments to provide clear information on the services they provide surrounding business licensing and tax filing processes.
6. Are you quick to respond to inquiries?
Another key to building trust between your agency and business owners in 2024? Timely communication. Only about a third of business owners reported receiving timely responses to their inquiries within 48 hours.
Prompt responses are critical in maintaining a good relationship between businesses and local governments. Businesses rely on quick and efficient responses, as this means less downtime and more clarity in operations. Responsiveness is often a measure of a municipality’s efficiency and commitment to supporting the local businesses in their community.
Are you ready to enhance the business owner experience in your community?
The trends uncovered in the latest GovOS report, “Uncovering the Business Owner Experience with Local Government,” should serve as a guide on how your agency can improve current licensing and tax collection processes and navigate the relationship with businesses in the year ahead. By creating a better experience for business owners and streamlining your licensing, tax, and communication, you can create a thriving economy and develop a healthy business-government relationship. To gain deeper insights, download the full report today.
