Number One Problem Facing Small Businesses: Big Government

© <a href="">Designersart</a> | <a href=""></a> - <a href="">Pie Chart Photo</a>That’s what the 1,500 small business owners said in response to a survey reported in the NFIB.  More specifically, 22% ranked taxes and 23% ranked government regulation and red tape — totaling big government — as the single most important problem facing their businesses. In contrast, the quality of labor was only 12%, poor sales only 11%, competition from big business only 7%, and financing and interest rates only 2%! Maybe a sampling of 1,500 owners isn’t statistically meaningful, but to me it reflects the anecdotal stories I’m hearing.

The Competitive Enterprise Institute’s Ten Thousand Commandments 2014 found that last year there were 72 new laws and 3,659 new regulations – 51 rules for every law, or a new rule every 2 ½ hours. It also found that small businesses pay more in per-employee regulatory costs than larger firms. Those with fewer than 20 employees pay an average of $10,585 per employee, compared to $7,755 for corporations with 500 or more employees.

How can small businesses keep up? How can small businesses afford the cost of complying with these regulations? The bottom line is that small businesses can’t!

My position: Regulations are necessary in some cases to protect the public and make compliance with laws more orderly. However, it’s clear we’ve reached the point of overkill.

As PWC says,

“No matter how large, small or diversified your organi[s]ation, almost every part of it is touched by a complex web of constantly evolving regulations — and subject to enforcement actions and fines.”

When rules are so complicated, it’s challenging to follow them and may result in noncompliance (intentionally or otherwise), which defeats the very purposes for which they were created.

It’s time for some reflection on regulations! A political solution (elected officials willing to cut the size of government, and the regulations this engenders) may be the only option for relief.


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