While small, agile businesses may have some distinct advantages over larger competitors, they also face their fair share of challenges. Small Business Week (April 29-May 5) provides an opportunity to spotlight those challenges and what can be done to overcome the obstacles. A wide range of stakeholders rely on the success of small businesses. Small job-shops, fabricators, subcontractors, parts suppliers, engineering firms, and niche manufacturers play important roles in the overall economic stability of the industry. We need small businesses to thrive.
Regulatory Red Tape
Of the issues facing small business, government regulations are probably the most talked-about. Deregulation became a polarized topic during the last presidential election as Candidate Donald Trump made promises to lighten the number of restrictions and compliance mandates.
Some believe small manufacturers are especially hit hard by regulations. NAM summarized the sentiment well in a recent report. “The cost of federal regulations fall disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole,” the report says.
NAM also says small manufacturers with less than 50 employees spend 2.5 times more than large manufacturers spend on compliance.
A recent White House report on the value of small businesses spotlighted actions taken to alleviate the regulatory burden on small businesses, such as deregulation. In FY 2017, Federal agencies issued 67 deregulatory actions and a full “Regulatory Plan and Unified Agenda of Regulatory and Deregulatory Actions” was prescribed.
An analysis of the Unified Agenda by Dan Goldbeck, a research analyst for regulatory policy at the American Action Forum, says, “Of the 579 actions listed in the Unified Agenda as deregulatory or regulatory, 448 are deregulatory, while 131 are regulatory,”
Trump opponents point out that many of the deregulations have been surface level and made minimal impact. While politicians debate the issues with heated rhetoric, small businesses continue to struggle to manage the complexity of federal and state regulations.
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