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Government Regulations on Small Business.

Please explain the impact of government regulations on small business.

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Impact of Government Regulations on Small Business

Regulations on small business are generally harmful. They cost too much not only financially, but also in labor time. Compliance costs can be high when dealing with a bureaucracy. Paperwork, phone calls, inspections, arguments and the occasional bribe do add up over time. This is especially the case for the most vulnerable, manufacturing, that has to compete with giant conglomerates both domestically and abroad. Regulations hit small manufacturing concerns far harder than any other small business, and, importantly, far harder than large manufacturing concerns. Since the effect of regulations on small business is disproportionate, it is unfair. The total estimated costs of regulation on small business across the board per year is roughly $2 trillion. While estimates vary, they are still shockingly high. Small businesses are vulnerable. They do not have the resources of the big chains and certainly cannot take the government head on (as Microsoft did, and won). Justifying this cost would take quite an effort. It is doubtful if it can be justified, especially in trying economic times.

In 2011, CNN Money performed an investigation into the failures of American small businesses. Among other things, they report that small business failures have ...

Solution Summary

The government regulations on small businesses are examined.