All Commentary
Wednesday, November 1, 1989

Making Dough in the Heartland

Ann Weiss Rogers is an attorney living in Ormond Beach, Florida.

Pizza shops generally don’t crop up beside corn fields, but in Stoutsville, Ohio, where the main drag is a post office, a pizza shop is thriving. What’s more unusual than its location, however, is that the business is located in a trailer.

My brother-in-law, Randy, is proprietor and sole employee of Randy’s Pizza-Subs-Sandwiches. When he purchased a building in that rural area several years ago, he envisioned renovating the two apartments and converting the third, which was unfinished and used for storage, into a pizza shop. But the problems Randy encountered proved to be both a lesson in how not to go about starting a business and how difficult the government makes it for individuals who start one with limited capital.

Randy had been a hog farmer for 15 years before he decided there had to be a better way to make a living. He thought a steady paycheck would be the answer to everything he ever wanted, but several years of working for others changed his mind. Consequently, when he saw that building for sale in Stoutsville, Randy didn’t see a run-down, old structure that needed a tremendous amount of work, he saw an opportunity for self-employment.

Since the two apartments were basically set up, Randy’s first priority was getting them ready and rented. He had used the equity he had in his farm to purchase the building, and he had given up his steady paycheck in order to work full time on it. As a hog farmer, though, he was used to living on next to nothing, and his children also knew that whatever money there was would go into the business. And, initially, everything was progressing according to his plan; after several months of cleaning, dry-wall work, painting, and some electrical work, he had both apartments finished and rented.

He then began working on the pizza shop. I followed his progress mostly through phone calls. I heard about the work he was doing at the time—putting in the counter wall, for instance—and all the jobs ahead: the plumbing that had to be done for the work-area sink and the rest room, the rewiring for the ovens, the floor he had to lay down, and all the painting and finishing work. I rejoiced with him when he called and said he was ready to move in his equipment. Then I got his next phone call. There wasn’t going to be a pizza shop, he told me. He had talked to the local Health Department the previous day, and had learned that everything he had done was wrong. Before he could build a pizza shop, the Ohio Environmental Protection Agency had to approve his water supply and sewage system; the Bureau of Environmental Health had to approve his plumbing; the Ohio Department of Industrial Relations had to approve his building plans; he also needed zoning approval from local authorities.

For example, to get approval from the Ohio Department of Industrial Relations, Randy had to file an Application for Certificate of Plan Approval, which had spaces for him to fill in the Ohio Registered Architect, the Ohio Professional Engineer, and the Ohio Sprinkler System Designer he had used. For this certificate alone, processing fees were $500 plus an additional charge, based on the square feet of the establishment, for each of five categories (Structural, Electrical, Sprinkler, Industrialized Unit, Life Safety Code Review).

And all this came prior to dealing with the Health Department, which had its own set of requirements. In addition to duplicates and triplicates of the previous approvals, the Health Department wanted plans drawn to scale of the location of water supply; sewage disposal; total area used for food service operation; entrances and exits; location, number, and types of all plumbing fixtures; lighting, both natural and artificial; general layout of fixtures and other equipment; building materials to be used; outside openings; and manufacturer’s name and model numbers on all equipment. Randy was told to expect the whole application process to cost a few thousand dollars.

A Change in Plans

It wasn’t the cost or the arduous nature of the application process that caused Randy to change his plans. And it never reached the point where Randy’s construction, plumbing, or electrical work became an issue. Rather, the whole issue came down to whether his water supply and sewage system could pass the Ohio Environmental Protection Agency’s (EPA) inspection.

Stoutsville doesn’t have a town sewage system. If it did, then its water disposal and sewage system probably would already have had EPA approval. The EPA clearance would involve merely testing Randy’s tap. Prospective businesses in bigger towns and cities, and facilities that already have businesses in them, basically get an automatic EPA nod. But the poorer rural areas, which have no businesses in them, stay poor.

“Isn’t there any way to get EPA approval?” I asked Randy. He said it would be too expensive, and he was afraid even to try. They might question his having apartments, and then he’d risk losing his entire investment.

His only recourse, he told me, was to convert the pizza shop into a third apartment. I was disheartened. Randy wasn’t a novice in the pizza business. A few years back he had bought a pizza shop near his farm in Williamsport, and had sold it a year later after doubling its business. But that pizza shop was established before all those regulations had gone into effect. Under a grandfather clause, it could continue to operate even though Williamsport wasn’t much bigger than Stoutsville and wouldn’t meet EPA requirements either. So what hope was there for the rural entrepreneurs yet to come? Were they all destined to leave for the city?

Randy concluded that the individual entrepreneur hasn’t got a chance because government regulations favor established businesses. The big pizza chains have the money to hire architects and sprinkler designers and to pay thousands of dollars for government processing fees—not to mention the real estate costs of starting a business in the city. But in the rural areas where buildings and land are more affordable to the individual, government regulations make starting a business unaffordable.

The next time I heard from Randy, however, he was jubilant. He had figured it out, he said. He was going to have a pizza shop in Stoutsville after all, but it wouldn’t be subject to any EPA or building or plumbing approval. He was going to convert a trailer and park it behind his building. A trailer is a mobile food service operation, which is subject to different rules. And this time he had talked to the appropriate authorities. He would need just a Health Department inspection. And he could get his trailer licensed by the Health Department in Pickaway County, which was where he lived, even though he was going to operate his business in the adjacent Fairfield County. This is because the license for a mobile food service operation has to be honored in every county in the state no matter what county it is licensed in. The license would cost $25 a year.

He had discovered a loophole, but like most loopholes, it carried a price tag. Buying and con-retting the trailer cost $3,000 more than he had figured to spend. And it took several more months than he had planned. But he had his first pizza ordered before he had even officially opened for business. “It’s about time something like this opened up here,” the customers tell him. Little do they know just how much it took.