3 Challenges Business Owners Face in Chicago

Date: March 17, 2014

Weather worries, parking shortages and high property taxes give resilient Windy City entrepreneurs much to overcome.

Landing on Forbes’ 2014 list of best cities to launch a startup, Chicago is
carving a new tech scene. But it’s also home to thousands of successful small
businesses in numerous industries. These organizations face challenges they
must overcome to thrive in the city’s climate—both literally and figuratively.

The
challenge: Cold weather hinders an ability to attract talent.

After digging out of Snowmageddon
just three years ago, Chicago small business owners faced record cold
temperatures and frequent snowstorms in 2014 that rendered major roads
impassable and temporarily closed businesses, leaving the city’s reputation for
harsh winters firmly intact.

That’s a problem. “The weather is
a bigger factor than a lot of people will admit,” says Gary Slack, owner of
business-to-business marketing agency Slack and Company. It’s making small
business owners concerned about hiring and attracting qualified employees, he says.

The
fix: Advertise the city’s positives.

As a Chicago business owner for
around 25 years, Slack touts to job applicants many of the city’s advantages,
including Chicago’s three pleasant seasons. It’s so temperate during those months, “it’s like living on a
resort,” he says. He also shows off Lake Michigan beaches and the city’s
culture—performing arts, museums and sports.

The
challenge: There’s plenty of people, plenty of cars—and plenty of parking
regulations.

All Chicago businesses that
feature deliveries as part of their service face a vexing issue: There are
often no parking spaces or loading zones available to drop deliveries off. For Mike
Schultz, operations manager for Marcel Florist, this makes deliveries an
expensive problem. “It is very difficult for us to get delivery drivers because
of the threat of getting towed,” Schultz says.

The fix: Avoid tickets in Chicago by finding
friends with downtown delivery docks.

Schultz
encourages his drivers, when not
making a delivery, to find loading docks throughout the downtown area. Then, he
suggests they make friends with those charged with operating those docks. That
way, if drivers are making a delivery nearby the dock in the future, they might
be allowed to park there even if the deliveries aren’t for that building.

The
challenge: High property taxes are a burgeoning expense.

“The property tax rate in Chicago
has made it unaffordable for most of us small businesses, with no relief in
sight,” says Cliff Surges,
owner of insurance firm Cliff Surges Agency Inc. Surges, an NFIB member,
operates two offices—one in Lakeview and one in the suburbs.

Surges says the property taxes at
his company’s suburban office are reasonable, but the company pays more than
$12,000 in property taxes annually for its 1,400-square-foot office condo in Lakeview.
“The rates have doubled since 2005, but my revenues have not doubled. We can’t
absorb those rates; it is just not sustainable,” he says.

The
fix: Don’t hold your breath.

Relief from high property taxes
isn’t near, and it may get worse. Crain’s Chicago Business reports the city must contribute nearly $600
million for police and fire pension funds in 2015. According to Crain’s, the city’s options to solve
this problem “could lead to the highest commercial property tax rate in the
nation.”

An increase could be as much as
71.6 percent. The “fix” might, instead, be an ominous prediction: “No city has
increased property taxes that much in one year because it would cause an exodus
of businesses and residents and a downward spiral that saps revenues instead of
raising them,” according to Crain’s.

Do you own a business in Chicago? Become an NFIB member today and join 350,000 other entrepreneurs who are saving time and money through their membership.

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The property tax
rate in Chicago has made it unaffordable for most of us small businesses, with
no relief in sight.
—NFIB Member Cliff Surges

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