South Africa’s jobs problem will not be solved by big projects and big employers alone. It will also be solved by micro, small and medium enterprises. These businesses hire locally, build skills and enter supply chains over time. If new licensing rules make it harder for them to trade legally, we are not only talking about administration. We are also making it harder for people to build a living and create jobs.The government has started to acknowledge these concerns. President Cyril Ramaphosa has said the final version of the Business Licensing Bill should make it easier, not harder, to start and run a small business. The department of small business development has said it is considering feedback from consultations. Parliament’s small business committee has also warned that municipal licensing backlogs are already blocking spaza shops from getting support and that licensing needs to be faster and more automated.This shift is welcome. Now we need to ask what must change so that licensing reform leads to more compliance in the real economy, including in municipalities that struggle with capacity?Most business owners do not argue against health and safety rules. They want clear rules and fair treatment. The frustration is that compliance often feels like a maze. Different spheres of government have different requirements. Processes are hard to understand, and steps take too long.For many entrepreneurs, access to information and language can be a barrier. Many owners do not have specialist help to complete forms or follow complex steps. For a microbusiness, the cost is not only fees. It is also time. The owner is often also the salesperson, the administrator, and the bookkeeper. Every hour spent chasing a stamp is an hour not spent selling, producing or serving customers. This gets worse when officials can add conditions or refuse applications without clear and consistent checklists. One municipality may give clear guidance and a quick answer. Another may take weeks or send the owner back many times for “one more document”. Such delays can mean losing the work.For a microbusiness, the cost is not only fees. It is also time. The owner is often also the salesperson, the administrator, and the bookkeeper. Every hour spent chasing a stamp is an hour not spent selling, producing or serving customers. Many municipalities already struggle with service delivery and backlogs. If licensing requirements expand without a clear delivery plan that matches local reality, the system will not bring more order. It will create more confusion and more uneven treatment. It can also create more opportunities for corruption.A workable system starts with a simple idea. Focus regulation where risk is real and keep the process light for low-risk businesses.Licensing should be required for activities that can seriously harm health, safety, consumers, or the environment. Low-risk businesses, such as home-based or early-stage microenterprises, should have a simpler route. In some cases, they should be exempt.If municipalities spend too much time processing low-risk cases, they have less time to focus on higher-risk activity. And if the system feels unreasonable, people stop trying to comply.Small businesses also know a common trap. A client demands proof of compliance before awarding work. The business needs work to afford the compliance steps. The result is a loop that keeps capable firms out of formal markets.A real example sits in an adjacent compliance requirement. A microenterprise may be inactive for years because there is no work. When an opportunity finally arises, the owner needs a valid Compensation for Occupational Injuries & Diseases Act (Coida) certificate to secure the contract, but cannot afford the renewal fees after a long period without income. COIDA is not part of the new bill but it shows the trap we must avoid. No work without compliance, and no compliance without work.A similar trap can happen under licensing if the process is slow and unclear. That is why “easier, not harder” must be visible in the bill’s design, and in how municipalities will implement it.So how do we strengthen the bill in a way that supports compliance and protects communities?First, relief for microenterprises must be reliable, not optional. The bill addresses support for small businesses, such as fee relief and simpler processes. But if this support is left to choice, it will be uneven. If the government wants more compliance, low-risk microenterprises need a clear pathway. Second, every municipality needs basic service standards for licensing. People must be able to see what documents are required, what the fees are, and how long decisions should take. Applicants must get written reasons when an application is refused. The process must be trackable so a business can prove it has been applied and can follow progress. Third, digitisation should be used to reduce delays and abuse. Digital applications and payments reduce the manual gaps where corruption and inconsistency can happen. Automatic receipts create proof. But digitisation alone is not enough. Where inspectors can confiscate goods or close operations, there must be clear accountability. Enforcement must follow clear steps and be documented. Lawful traders must be protected from abuse.Fourth, the bill must make it simple to fix a problem and reapply. If a business is refused because of a missing document or a fixable issue, the route back to compliance must be clear, time-bound, and simple. Written reasons for refusal are not enough if there is no practical way to reapply after the problem is fixed. Small businesses often have short opportunity windows, so a dead-end refusal can lead to market exclusion.Fifth, renewals must not become a repeat burden for the smallest firms. A five-year renewal cycle can sound reasonable on paper. In practice, it can add costs and administrative work that fall hardest on struggling microenterprises. If renewals are required, low-risk firms should have a simplified, low-cost process, with clear reminders and as much automation as possible.Sixth, enforcement should help build compliance, not create fear. It must also be credible. A punitive-first approach in a confusing system can drive legitimate entrepreneurs away from formal channels. An education-first approach can work better. Clear notices, fair penalties and real appeal routes will help grow compliance over time.Finally, small business voices must be part of the system, not only part of consultations. Consultation matters, but it is not the same as built-in representation. If co-ordination structures are created, small business stakeholders and the department of small business development should be included to ensure implementation remains grounded in lived reality.The government has signalled that it is listening. That creates an opportunity to build a bill that improves safety and order without creating new barriers for small business.The choice is not between regulation and growth. The choice is between a licensing system people can use and one that quietly breeds more informality, more distrust and fewer viable businesses. • Sipula is head of research and impact at Property Point