The SBA Office of Advocacy reports that it helped to save small business over $6.6 billion in fiscal year 2005. By
working with federal agencies to implement the Regulatory Flexibility Act, Advocacy ensured the voice of small business was heard in the regulatory process. That effort resulted in rules which met their regulatory goals while at the same time lessening the burden on small business compared with the original proposals.
Previous research has shown that the smallest of businesses annually spend $7,647 per employee to comply with all federal regulations. That is 45 percent more than the $5,282 per employee spent by firms with 500 employees
or more.
However, NFIB noted that while this report is a good first step, it's also a reminder that much more needs to be done to relieve the heavy regulatory demands that continue to disproportionately burden America's small-business community.
NFIB recently conducted an e-mail survey to gather first-hand accounts of how regulatory compliance affects its members and their businesses. NFIB member Gregory Stewart is a small-business owner who runs American Logistics, Inc a trucking business in Climax, Michigan. Stewart was recently forced to hire a third-party consultant to manage and file all of his business' U.S. Department of Transportation compliance paperwork, because it is too time-consuming and onerous for him to manage on his own.
"It costs me roughly $90 per month, per driver in paperwork and compliance costs. Right now my business is expanding and I would like to hire more drivers, but the costs and the paperwork involved with DOT compliance keeps me from doing that," said Stewart. "More than 40 pages of paperwork must be filled out to hire just one new driver."
Stewart noted that it’s often difficult for businesses to keep track of regulatory changes and new requirements. Being a small-business owner, he said it’s tough to run a business and still have time to read 40 pages a week about minor policy and compliance changes. As a result, he depends on his consultant to learn about new regulations and compliance guides.
Without continued pressure, this could be a case of one step forward and eventually two steps backward. Remember that since the time that President Reagan passed his tax simplification, the IRS code has doubled from 30,000 to 60,000 pages.
