October 25, 2014

Will New Move to Cut Government Regulation Help Small Business?

Default-Image-13

A longtime complaint of small business owners – that government regulations are too onerous and hamper their ability to create jobs and profits – is getting an answer of sorts. Back in January, President Obama ordered a government-wide review of regulations affecting businesses. Now, 30 federal agencies and departments have announced specific plans to reduce regulations, the Los Angeles Times reports.

White House officials said they were committed to getting rid of regulations “that are out-of-date, unnecessary, excessively burdensome or in conflict with other rules.” Here are some of the changes proposed under the “21st Century Regulation” initiative:

  • The Occupational Safety and Health Administration (OSHA) is announcing a final rule that is estimated to remove more than 1.9 million annual hours of redundant reporting burdens on employers and save more than $40 million in annual costs.
  • EPA has proposed eliminating the redundant obligation for many states to require air pollution vapor recovery systems at local gas stations. The regulation is unnecessary because most modern vehicles already have effective air pollution control technologies. The change is expected to lead to annual savings for businesses of about $67 million.
  • The State Department and the Commerce Department are taking steps to eliminate unnecessary barriers to exports, which include removing duplicative and unnecessary regulatory requirements. The goal is to increase U.S. exports and create jobs.

While some of the regulatory changes have already been made, or are in the process of being finalized, most of the changes will need to go through formal rule-writing procedures that include gathering public comments. And the comments are already flying fast and furious.

The Administration’s goal is to “[protect] public health and welfare while promoting economic growth, innovation, competitiveness, and job creation.” Sounds like two great goals, right? Whether both goals can be achieved is the question. Already, there’s conflict in the business and political communities over the new proposals.

The U.S. Chamber of Commerce, while supporting the spirit of the White House’s efforts, says the recommendations to remove some regulations didn’t go far enough. The Natural Resources Defense Council, on the other hand, is concerned the changes may go too far and remove protections to public health and safety.

See for yourself—and please make your voice heard. After all, if you complain without taking action, you’re part of the problem. Visit The White House, Regulatory Reform, to read the proposed changes and offer comments and feedback.

9 Comments ▼

Rieva Lesonsky


Rieva Lesonsky Rieva Lesonsky is a staff writer for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow her on Google+ and visit her blog, SmallBizDaily, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

9 Reactions

  1. Reducing red tape can only help. First by making it easier for businesses (small and large) to comply and second, by reducing the overhead cost the government is imposing on every tax payer. Our government is simply too large.

  2. I am excited about this news. There are so many useless business regulations out there that hamper small businesses success. This is great news for small business owners, and the American economy.

  3. Hi Rieva,

    It’s nice to see that the government is taking some action against policies that were now of no use. Over time there must be checks and balances to understand what works well with today’s market. I am sure a lot of political agencies will have issues with the changes made, but it’s a good step. Businesses would be happy! Thanks for sharing.

    Riya Sam

  4. The title of this article suggests there might be something here for small business, but nothing in the body shows how small business will benefit. OSHA, gas stations, and export regulations aren’t exactly mainstream concerns for 99% of businesses between 1-19 employees.

    And always be wary of numbers that are all rolled up to look impressive. Those OSHA numbers of 1.69 million hours and $40 million dollars saved annually sound really impressive until you divide them by the 28 million businesses in America. Then you come up with 4 minutes 4 seconds per year and $1.43 per year saved by each of us.

    So will cuts in government regulations help small business? Apparently not. It’s mostly an elimination of duplicate regulations that doesn’t reduce any work for us but allows politicians to pretend they’re on the side of small business without really removing any regulations at all.

    Lies, damnable lies, and statistics.

  5. I’m fairly confident that whatever burdens they remove, they will replace it with additional things to make us do and report.

  6. Maybe so Chuck, but in that group (lies & stats) you can count those 28 million small businesses. I frankly don’t believe there are that many legitimate businesses. Those numbers are based on tax returns–and I believe include Schedule C filings, some of which are simply not real businesses.

  7. Rieva,

    Both you and your client, the SBA, assume that someone who files a Schedule C and has no employees are not “real businesses” and can’t be counted as “legitimate businesses”. I will disagree. Strongly.

    Just because someone is making $20,000 a year instead of $3.2 million, doesn’t make them an illegitimate business. Or just because they work in a cube making $35k and have started a side business to try to get out of the cube, that doesn’t make that side business unreal. Using this view, I don’t see how a $20,000 employee is real, either – we should only count employees who make a lot of money.

    Nothing could demonstrate a big business view of the world more than discounting Bill Hewlett working in his garage, Steve Jobs working in his garage, and Mrs. Fields making cookies in her silly little shop. If it doesn’t produce big numbers, it simply doesn’t exist – not real, illegitimate.

    I wonder how the 21 million small businesses with no employees who simply report on a Schedule C feel about this view of them right now. I know how one of them would respond.

    My wife had a piano business that did $15-35k a year for 30 years on a Schedule C. I’ll have to tell her that was just a hobby; that all the blood, sweat and tears she put into it and the incredible lifelong impact she had in people’s lives doesn’t allow her to be counted as a small business, because she didn’t have employees or big revenue.

    I had a number of Schedule C businesses in between my LLCs and S Corps – some of which that netted $150k+ in income a year – not a business in your view – or in the view of your client, the SBA. I have a friend how does $300k a year on a Schedule C with no employees – not a business by SBA or Rieva Lesonsky standards.

    Some people can summarily decide that those 21 million Schedule C businesses are “lies”, not “real”, and not “legitimate”, but I will respond that people with this view should never tout themselves as champions of small business. That’s 21 million jobs these very real businesses are providing to the economy – not bad for what some would call illegitimate.

    Let’s take a look at your clients and see why someone like you might have this view of small business. The only clients listed on your website are – AllBusiness.com, AT&T, Bank of America, Microsoft, SCORE, Startup Nation, Toshiba. No wonder you don’t approach those 21 million business owners as businesses.

    Oh, by the way, your website provides the following service to your giant corporation clients – “Access our proprietary database of over 20 million small and midsize businesses” – http://www.growbizmedia.com/corporate_marketers.html

    There are only 7 million businesses in America that are either non-Schedule C, so you have 13+ million illegitimate, not-real hobbyists to purge from your database.

    I understand your position. Your advocacy is for your clients and your clients are giant corporations, not small businesses. And as the old saying goes, when people show you who they are, believe them.

  8. One more thing. If we use your definition of business and exclude the 21 million you find illegitimate, that leaves us with 7 million businesses.

    The OSHA reductions touted here would save each of them 16 minutes and 16 seconds per year and $5.71 per year. Not likely to make a business owner go out and hire a new employee.

  9. Do you have better examples? The examples you provide are either too vague or applicable only to a narrow slice of businesses.

    I worked with outgoing Sec of Commerce Gary Locke on the eFairness initiative in the early days of analyzing internet sales tax. The top small business expenses are labor and taxes. Many times the issue isn’t just the regulation itself, it is the cost of hiring professional help to decipher and ensure compliance with new regulations. Federated Department Stores spends $5 million a year on such professional services. While the average small business isn’t going to spend as much, it still ends up spending five to six figures on related fees.

    Absent concrete examples, gains like these are usually a wash at best when the total cost of incorporating these new rules is taken into account.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



Compare your business to the industry - Try our new tool