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| Jack Faris is president of NFIB (the National Federation of Independent Business), the nation's largest small-business advocacy group. |
At 10,000 feet, mountain climbers begin experiencing the first symptoms of acute mountain sickness -- dizziness, shortness of breath and nausea among them. Experts say the only cure is to either turn back and go down the mountain or adapt to the climate.
American small-business owners, attempting to reach the summit of their dreams of success, have for years been feeling similar symptoms as they struggle against what they view as an ever-growing mountain of government regulation.
According to the U.S. Small Business Administration's Office of Advocacy, the nation's smallest firms shoulder the largest per-employee burden of federal regulatory compliance costs. The study shows that firms with fewer than 20 employees spend nearly $7,700 per worker just to comply with federal rules, as compared to about $5,300 per worker spent by companies with more than 500 employees. Overall, the disproportionate regulatory compliance impact on small firms is 45 percent greater than that faced by their larger counterparts.
The annual cost to comply with federal regulations has reached $1.1 trillion, a burden that falls heaviest on the nation's small manufacturers. The report, which analyzed compliance costs for economic, workplace, environmental and tax regulatons, revealed a particularly stark picture for the manufactoring sector, noting that the cost per employee for those small firms is at least twice the compliance cost for medium and large enterprises.
But before some of the nation's entrepreneurs begin to doubt their ability to reach their chosen peak and turn back, they should consider some efforts that have been undertaken to help them adapt to the rarified climate.
By constantly monitoring the Regulatory Flexibility Act, which was designed to make sure the impact on small business was considered during the regulatory process, SBA's Office of Advocacy has helped small firms keep billions of dollars for job creation and new investment, instead of spending on overly burdensome bureaucratic rules.
The small-business watchdog says the U.S. Environmental Protection Agency has also made soem progress in easing regulatory burdens on small manufacturers. EPA, according to Advocacy Chief Counsel Thomas Sullivan, has proposed to streamline the annual papework requirements for the use and management of chemicals. This approach could save businesses an estimated 165,000 hours and still maintain environmental protection and communities' access to information.
Also, allowing small business to pause and catch its breath during its trek up Mount Regulation is the Securities and Exchange Commission, which extended the filing deadline for a Sarbanes-Oxley Act requirement forcing small, public companies to review and report on their financial control procedures. And the SEC has created an advisory committee that is charged with examining the effects of the act on other aspects of federal securities law on small firms.
Every small-business owner who sets out to scale the heights of success expects to face challenges, but the natural forces of economic storms and marketplace competition provide more than enough obstacles. Thankfully, SBA's Office of Advocacy recognizes that government's role should be to smooth the path, not make it more difficult.
