Expert Tells House Committee Small Businesses Need Their Own Regulations

Reducing the Regulatory Burden on Small Businesses

Small businesses need their own regulations. That was the sentiment shared by Phillip K. Howard, founder of the non-profit organization Common Good, at a hearing before the U.S. House of Representatives Small Business Committee recently.

His argument, in general, states that overly complicated regulations place a huge burden on small businesses. The costs per employee of these regulations is much higher for small companies than they are for large companies just based on the resources those businesses need to spend simply to understand and comply with government regulations.

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Reducing the Regulatory Burden on Small Businesses

More specifically, Howard laid out three steps that Congress can take to reduce the regulatory burden placed on small businesses. The first step involves appointing an independent commission to test methods for making compliance easier on small businesses. The second would involve the creation of one-stop-shops where small businesses could get any type of federal permit. And the third would privatize the enforcement of regulatory issues by allowing small businesses to receive approval from certified regulatory experts.

“It would initiate such energy in our society, if people could be confident that they understand the law and can follow their hearts to do what has made the American economy great,” Howard said to the Committee.

Howard’s suggestions would theoretically allow small businesses to spend less time worrying about regulations and more time running their businesses. His argument, in part, is that the small businesses that actually care about following the rules are put at a competitive disadvantage, because they have to dedicate so much time and resources to understanding all of the complicated compliance issues that were largely created with big corporations in mind.

Instead, he thinks that small business regulations should be simple and easily accessible for all. This could encourage more innovation and entrepreneurship throughout the country and provide a big boost to the economy as a whole, Howard argues.

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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

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