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Small Business Success Index 4

Index Score*   Grade
73 marginal
Capital Access 67
Marketing & Innovation 65
Workforce 76
Customer Service 88
Computer Technology 73
Compliance 92
*Index score is calculated on a 1-100 scale.

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Posts Tagged ‘Compliance’

Regulatory Costs Crunching Small Businesses

November 1st, 2010 :: Rieva_L

By Rieva Lesonsky

This probably isn’t news to you as a small business owner, but the SBA’s Office of Advocacy has published a study showing that the costs of government regulation are disproportionately affecting entrepreneurs. The Impact of Regulatory Costs on Small Firms looked at five economic sectors (manufacturing, wholesale and retail trade, services, health care and “other”) and the federal regulations that affect them.

The results? Small companies spend $2,830 more each year per employee to comply with government regulations than big companies do. “That is a 36 percent difference, and that is an unfair burden to place on American small business,” said Winslow Sargeant, Chief Counsel for Advocacy.

Per employee, the average cost of compliance for businesses of all sizes was $8,086 per year. For companies with fewer than 20 employees, it was $10,585; for those with 20-499 employees, it was $7,454; and for those with 500 or more employees, it was $7,755.

Here are some areas where the burden was especially disproportionate on small firms:

  • Manufacturing: Per-employee costs of compliance were more than twice as much for small manufacturing companies than for midsized and large firms.
  • Environmental regulations: Compliance with environmental standards costs small businesses almost four times as much in as big ones.
  • Taxes: Tax compliance costs small companies more than double what it costs large ones.

The oversized burden small companies shoulder isn’t new—it’s continuing a trend. The Office of Advocacy’s prior studies in 1995, 2001 and 2005 also showed small businesses paying more than their share of regulatory costs.

I believe government regulations can be a good thing—but it’s only fair to spread the cost of this type of regulation proportionately over different sizes of businesses so that small companies can stay competitive. You can find out more about your industry and details of the report at the Office of Advocacy website.

Image by Flickr user (Creative Commons)

Compliance is Easy. If You Love Regulations.

March 9th, 2010 :: Steven Fisher
On February 16, Network Solutions and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business released the findings of their Small Business Success Index survey.  The index is designed to track the competitive health of the small business sector over time, and the results are always interesting.  Scores in 6 categories are graded; compliance got an A-.
The area of compliance, including complying with laws and regulations, keeping customer information secure, and keeping up with laws and regulations. Small businesses are generally successful in this area and have been for the last 12 months the report has been done. This is not bad but there are still some things to address.

Don’t Let the Man Get You Down

According to the SBSI report, even though compliance is not a problem area, 54 percent of owners feel that government regulation is becoming more burdensome. This sentiment has also grown in the past year, raising the question of why small businesses have these concerns. One possible explanation for the perception of increasing burdens may be the economy and how it affects the behavior of governments. Local, state and federal agencies may be becoming more stringent in the enforcement of fines and seeking new ways to tax small businesses in an effort to make up for their own revenue shortfall. One example is real estate assessments, an area where local governments are often accused of exaggerating values when they need to raise revenue.

Protect and Serve….Your Data

The other side of compliance is keeping customer information secure. This does tie into regulations that might apply to some data (HIPPA, Sarbanes-Oxley) but overall companies are up on the technology and have implemented systems to secure and protect data. Where they feel the pressure is the aforementioned burden of government regulation. Currently, small businesses feel they can comply but are concerned that any more regulation might cause them to incur infrastructure and personnel expenses that they are not able to support putting them out of business.

Download the SBSI Report Right Now

If you are reading this on the web site,, you should see a link to the report or if you don’t or a looking at this in a feed reader, you can get the report at