Regulation
• Forty-five (45) percent of American small employers now consider government regulation a “very serious” business problem, up 28 percentage points from 2001. Meanwhile, 10 percent do not consider it a business problem, down 19 percentage points over the same period. Owners of larger, small businesses are more likely to think regulation is a serious problem than owners of smaller, small businesses.
• Additional paperwork is most frequently cited (24%) as the primary adverse impact of regulation, followed by the dollars spent to comply (21%) and understanding what is necessary to achieve compliance (17%). The distribution of perceived impacts is similar to the distribution recorded in 2001.
• The regulatory problem is more commonly thought of as the volume of rules emanating from a great variety of agencies (and levels of government) (62%) contrasted to a focused set of them emanating from a concentrated number of rule-making authorities (28%).
• Forty-nine (49) percent of small employers identify the federal government as the level causing them the most regulatory problems. The states receive the second most number of cites (33%) followed by local jurisdictions (12%).
• The most frequent small-business owner concern arises over tax-related regulations (39%). Environmental regulation, including zoning and land use, was cited with second greatest frequency (16%), followed by economic and operational (14%), health and safety (13%) and employeerelated (11%). Seven percent could not decide.
• The narrower regulatory areas of special small-business concern include: employee taxes and withholding, various operating rules, financial rules, sales and use taxes, and land use (including zoning and run-off).
• The large majority (71%) of small employers discover new and/or modified regulations in the normal course of doing business. In contrast, 21 percent typically discover them through systematic search. The proportion systematically searching has fallen 10 percentage points in the last 11 years.
• Those owners who locate new and/or modified regulations through conventional operating business channels often find relevant information from other similarly affected business owners, outside business advisors like lawyers or accountants, and trade association publications or Web sites.
• Those owners who locate new and/or modified regulations through systematic search typically explore a variety of sources. However, the most common (75%) is the Web site of a pertinent agency.
• Both those who discover regulations in their normal business routine and systematic searchers commonly discover new and/or modified regulatory information through direct contacts from regulatory agencies, including flyers, advisory letters, etc.
• The manager (owner) is the person most likely (69%) to determine how the firm will come into regulatory compliance. The small employer will typically hire an “expert” in 14 percent of cases and assign compliance to an employee in 11 percent of them. Five percent say that different situations require different people to determine appropriate compliance activity.
• Small-business owners and managers who put themselves in charge of regulatory compliance tend to adopt one of two approaches: the first relies heavily on private networks, such as other business owners; the second relies heavily on public networks, such as direct contact with the regulatory agency. Web searches are commonly employed by both groups.
