Yesterday, Trump issued an executive order aimed at significantly reducing regulation for businesses. While navigating regulations are a large part of any businesses, they can be both cumbersome and costly for smaller businesses where resources are more often than not scarce. A 2017 Small Business Regulations Survey found that the average small business owner spends at least $12,000 a year simply dealing with regulations. 14 percent of small business owners spend more than 20 hours a month on federal regulations, and more than half spend on average more than $80,000 in their first year of operation.
Hierology founder Adam Robinson says that his company was formed and built entirely under the Obama Administration, and even if it’s been able to grow, navigating regulations was nonetheless difficult. He said that if he were to start the business last year, regulations would most likely get in the way of a successful business. Once a small business brings on a 50th employee (and Hierology now has 120), it faces even more regulations, which might discourage small businesses to expand further. There isn’t as much of an incentive to grow if it places a bureaucratic burden on businesses.
Trump’s promises to repeal ACA, loosen regulations and simplify the tax code have made small businesses hopeful. Yet there’s still a downside to taking away these regulations. Some business owners are worried about losing regulations that exist for a good reason. Redoing the tax code would affect the whole accounting industry, as well as the small businesses that will have to learn how to navigate it. The same report that said small business owners spend at least $12,000 a year also pointed out that more than a quarter of the respondents grossed between $1-5 million, so some have argued that the money going towards regulations is a pretty small percentage.
The uncertainty around these changes has led to anxiety in the small business community. Many small business owners are looking to see how a new administration will be able to work with a Congress that’s been getting more and more fragmented. And regulations that are harmful to one small business are beneficial to others. For example, a small business relying on cheap unskilled labor will have different concerns than one operating with skilled labor. Regardless of emotions, small business owners are looking to see the details and ultimate aftermath.
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