Key takeaways from the Fall 2022 Philadelphia Ease of Doing Business Survey
The survey was conducted by the Diverse Chambers Coalition of PHL, and released during this year's MED Week on Oct. 6.
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As part of the 38th annual MED Week last year, the Diverse Chambers Coalition of Philadelphia presented the results of the Fall 2022 Philadelphia Ease of Doing Business Survey on Thursday, October 6.
The survey polled a number of diverse small business owners across the region, and posed key questions about factors that impact the ease of doing business.
Here are some of the key findings from the extensive survey:
1. The COVID-19 pandemic heavily impacted Philly’s small business community
According to the survey, 55% of respondents said they have yet to recover from the COVID-19 pandemic.
“Even though we want this pandemic to be over, the ripple effects from the pandemic have been affecting our businesses still to this day,” said Zachary Wilcha, executive director of the Independence Business Alliance.
2. Crime has impacted businesses across Philadelphia
According to the survey, 48% of business owners said crime has impacted their businesses in some way this year.
“That’s a slight improvement from the last time where we heard that 50% of businesses were affected by crime,” said Wilcha, adding that it’s “statistically insignificant of a change.”
However, the crime impact has led to a trickle down effect, including more investment in security, increased difficulties in recruitment, reduced hours of operation, fewer customers, and higher insurance costs among the most prominent.
“These are all very problematic issues when it comes to maintaining, starting and thriving as a business in the Philadelphia region,” added Wilcha.
3. Most business owners are unaware of the PHL Business Owners’ Bill of Rights
In 2019, the City of Philadelphia officially adopted the Philadelphia Business Owners’ Bill of Rights, outlining the rights every business owner is entitled to, such as transparency, fairness, and consistency in the application of the rules.
According to the survey, 87% of respondents were not aware this document existed.
“Part of what we're doing here today is helping everybody become more aware of what the good elements of doing business in the city of Philadelphia [are], where the opportunities for improvement are, but more importantly, it's critical that our small business community become engaged and participate so that we can all together improve the outcomes,” said Jennifer Rodriguez, President & CEO of the Greater Philadelphia Hispanic Chamber of Commerce.
4. Many business owners would not recommend Philadelphia as a city to do business
When asked a question about whether existing business owners would recommend Philadelphia as a city for other entrepreneurs to do business, respondents were given a net promoter score of -48.
A net promoter score is a widely adopted way of measuring customer satisfaction in business.
“What we’re finding is that this is a slight improvement over the last time we asked this question… [when] the net promoter score was -55,” said Rodriguez.
“Things seem to be inching in the right direction, which is great news for us, but there's still some room, of course, to be improved,” she added.
The survey also revealed that 65% businesses of 1-5 employers would not recommend Philadelphia as a city to do business.
“I think we all instinctively know that small businesses don't have a lot of resources [and] don't have a lot of capacity to interact with government,” said Rodriguez. “And this is something that is sort of clear, front and center here.”
5. There is room for improvement for Philadelphia in terms of ease of doing business
Arizona State University did a 2021 ranking of 134 U.S. cities in three categories — taxes, starting a business, and ease of doing business.
In those three categories, Philadelphia ranked 76, 84, and 60, respectively.
“Without needing any definition, what we’re seeing here is there is big room for improvement in all those areas,” said Khine Zaw Arthur, President and CEO of the Asian American Chamber of Commerce of Greater Philadelphia.
According to the survey, respondents identified five key services most sought after this year: paying taxes, renewable of permit or license, sanitation, new permit or license, and police.
When it comes to filing taxes, getting or renewing a permit or license, and getting approvals, the complexity of the processes were one of the leading concerns across the board.
“We really need to improve these areas… we want to bring the complexity down,” said Zaw Arthur.
“And we also want to promote that Philadelphia has a tax structure that really fosters small business growth, that will become the incentive that will bring more small businesses into Philadelphia, and more importantly, that will keep small businesses in Philadelphia,” she continued.
6. Majority of Respondents are small business owners, solo entrepreneurs
Of the respondents who took part in the survey, 37% owned businesses of 1-5 employees and 35% were solo entrepreneurs.
Rounding out the survey, 16% employed 6-10 individuals, and 6% employed 11-15 and 16 or more employees, respectively.
In addition, a large majority of these respondents’ businesses produced somewhere between $0 to $499,000 in revenue in 2020.
The top industries represented by survey respondents were: food services, restaurants & accommodations; retail trade; professional; scientific and technical services; arts entertainment & recreation; construction; and educational services.
“For the third survey in a row, we've had more respondents every single time. We also have reason to believe that every time we do these surveys, we’re going to get more and more respondents,” said Rodriguez.
She shared that participation in these biannual surveys are critical in getting actions done.
“When we talked about the different challenges that businesses in Philadelphia had leading up to what would be prioritized in the City budget, we were able to use that data in meaningful ways to partner with the Inclusive Growth Coalition at the Greater Chamber of Philadelphia, to make sure that City Council knew that our businesses needed a tax break,” added Rodriguez.
This led to a reduction in the Business Income and Receipts Tax (BIRT) in Philadelphia for the first time since 1988.
Rodriguez hopes that the results of this latest survey will help decision makers and stakeholders at the City improve ease of doing business and address further challenges facing Philadelphia business owners.