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Exclusive: Worcester Not Tracking Business Growth

Monday, May 21, 2012

 

 A GoLocalWorcester investigation uncovered Worcester does not know exactly how many new businesses have popped up in the last year or in the last five years in the city, for that matter. The reason: the city doesn't track new businesses through the clerk's office.

Since Jan. 1, there have been 299 business certificates obtained through City Hall. Finding out how many of these businesses are new, however, isn’t as easy as you might think. Currently the city doesn not track how many new businesses open up each month or even each year in the city.

Under the city’s current system, there is no way of knowing which are new companies. To find out, you’d have to cross check the lists from each year – a time-consuming task an already busy city hall staff doesn’t perform.

GoLocalWorcester looked at the business certificates purchased through City Clerk David Rushford from Jan. 1 through May 15, going back two years. The number has risen steadily each year: from 181 in 2010, to 267 in 2011 to 299 this year. But as Rushford pointed out, his department issues the certificates and keeps a public record of them; neither he nor his staff is responsible for determining which were issued to new businesses and which are being renewed.

No one’s responsibility

“We can’t do that,” said Rushford. “It isn’t our function. Our role is confined to the filing of certificates. They’re filed in a public database and anyone who may want to look at that information, or who wants to help small businesses, the information is there.”

It’s there, in a dropdown menu under “Search Public Records” on the city’s Web site. The problem is city officials don’t appear to be searching it.

“We don’t look at business certificates,” Chief Development Officer Timothy McGourthy said. “There are over 6,000 businesses in Worcester, 10,000 according to some counts. Business certificates don’t indicate much in terms of what businesses are in Worcester. It isn’t in any way reflective of the amount of business in the city.”

Starting out

Tell that to Maureen Carroll, a 2011 Worcester State University grad who has been unable to find a job despite sending out 37 resumes since January. Having no luck, Carroll decided to take matters into her own hands and start a cleaning business.

“I have the time and I have the experience of marketing and outreach,” said Carroll, a double major in urban studies and geography who graduated magna cum laude. “It’s not my career goal, but something I can do on my own. It’s a rough world for graduates.”

So Carroll paid for a business certificate to start Heritage Cleaning Solutions, something with low overhead and start-up costs, since it costs just $50 for a business certificate and materials and equipment can be bought relatively inexpensively. As of Tuesday, Carroll was the latest to obtain a certificate from city hall.

“If no one else will hire me, I’ll hire me,” Carroll told GoLocalWorcester. “I’m not going to lie down and die and wet my pants because I can’t find a job.”

Certificates required

Business certificates are filed every four years, as required by state law, for individuals Doing Business As a particular name. They are commonly referred to as DBA’s. Incorporated businesses do not file business certificates with the city. Their records are kept on a state level and some publications list them by city and town. Multiple businesses setting up shop in the same building would also not be reflected on the list of business certificates. The city, McGourthy said, collects data on a piece of property and would have information on a particular building. But corporations operating inside that building would be filed with the state.Not every business filing a certificate would qualify as “small.” One of the filers, for example, was National Grid.

Also worth noting is there is no requirement for a filer to note whether the business is new or simply filing a renewal.

According to Philip Niddrie, the city's Business Retention Manager, the Economic Development Office has been trying to change that, and had asked the city clerk's office to make a notation on each certificate for which businesses were new or refiling. It was, he said, an informal process.

"I haven't gotten any this month," Niddrie said.

There's a reason for that. According to Rushford, state law does not allow him to make any entries on business certificates other than what is allowed. The law currently has no requirement for noting whether a business is new or refiling. 

"It was requested, but we don't do that," said Rushford. "I think we did it for two weeks. I'm all about having data available that will be useful. But the law states exactly what is to be placed on the certificate. I cannot add anything to it."

‘Word of mouth’

How, McGourthy was asked, does the city keep track of all new businesses?

“A lot of it is word of mouth,” McGourthy said. “We look at new stores, new activity on the development scene, and try to highlight it as an example of Worcester business activity.”

The Economic Development office publishes a yearly review. The most recent, entitled “Economic Development: 2011 Year in Review,” includes a section that highlights many of the new businesses that emerged last year. The report was authored by McGourthy, City Manager Michael O’Brien and Director of Business Assistance Paul Morano. In the introduction of the report, it reads, in part: “Worcester also welcomed a mix of exciting new commercial establishments, including Nuovo Restaurant, Zorba’s Taverna, Woo Berry, Still and Stir, Anytime Fitness, and Aldi Food Market.”

The report features a list of 35 new food, retail, commercial and entertainment venues, such as New Chef Ho Restaurant, Fried Chicken, Webster Square Vision Center and California Nail.

Who will be on next year’s list is yet to be determined. It probably won’t feature Heritage Cleaning Solutions, because that business isn’t being run out of a storefront. Staying afloat and rising above other new businesses will no doubt be challenging for Carroll. Even McGourthy acknowledges part of the reason the business certificate, or DBA, list isn’t referenced is because most of the companies are “a small percentage of the businesses out there.”

The city does, McGourthy added, try to incorporate all information when analyzing the overall success of businesses in Worcester. One such tool to help do so is Worcester Business Research Alliance, which includes the city and nine other area organizations. That group is holding a seminar for new, start-up businesses on May 23 at Worcester Polytechnic Institute as part of National Small Business Week. The free event runs from 7:30-9:30 a.m. in Alden Memorial Hall and will offer advice and assistance to small business owners and entrepreneurs.

Keeping track

The issue of tracking new businesses is an interesting one, according to Stephen Eide, senior research associate with the Worcester Regional Research Bureau. That organization does not keep statistics on new businesses, he said. He acknowledged that some businesses, such as the one Carroll has started, may not receive as much attention.

“These are interesting questions because not all businesses are equal,” he said, noting the city also does not keep track of businesses that close.

With the tools it has, the city does its best, according to McGourthy.

“We’re constantly interacting with businesses at all levels. It’s not that we don’t use every bit of data,” McGourthy said. “But we’re trying to stay on top of all these businesses while recognizing our limited resources.”

That said, McGourthy acknowledged his department might be able to make better use of business certificates when it comes to analyzing new businesses in the city.

“It’s something we can look at and see if we can use them more,” McGourthy said. “We have better experience connecting with companies through word of mouth, outreach and various business groups.”

There is a use for business certificates, according to Richard Kennedy, president and CEO of the Worcester Regional Chamber of Commerce. There is also a need.

“I believe there could be a better way (of tracking new business),” Kennedy said. “That’s probably not a bad idea. You have to have a pretty good reach into the community. But a business certificate could be used, whether it reflects the lion’s share of business in the city or not. Maybe they could call another community and say, ‘How do you track this?’”

 

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