Small Employers Sound Off on Red Tape

November 29, 2001 ( - Small business owners are not only frustrated by the increasing amount of required paperwork, but are also confused about what the regulations require them to do, according to a National Federation of Independent Business survey.

The poll, Coping with Regulation, also revealed that entrepreneurs are more annoyed by the inconvenience of compliance with government regulations than they are over the direct costs those regulations require their businesses to bear.  The poll is the latest in the group’s National Small Business Poll series.

Bureaucratic Nightmares

Asked to name their primary concerns associated with regulations:

  • over a quarter identified the extra paperwork
  • 22% noted the difficulty understanding what is needed to be in compliance
  • the same number mentioned the cost
  • almost one in ten mentioned time delays
  • 7% noted the difficulty locating new regulatory requirements

Reddest Tape

When asked to list the most onerous regulation:

  • over a third identified federal, state, and local tax-related rules
  • 21% cited operational regulations such as occupational licensing and the rules for a particular industry
  • 17% listed environmental and land-use regulations
  • a little more than one in ten mentioned health or safety regulations
  • 9% cited the regulations associated with the terms and conditions of employment.

Survey findings also reveal that 82% of small-business owners typically discover new regulatory requirements in the normal course of business activity, while only 12% periodically search relevant materials to locate new requirements.

One or more government officials entered 42% of the sample’s businesses over the last year to inspect them, examine their licenses or records, or otherwise check on their compliance with a government regulations, respondents said.

Behind the Rules

When asked to name the primary source of troublesome regulation:

  • almost 50% named the federal government
  • just over a third listed the state government
  • 13% mentioned state and local laws.

Samples for the poll come from the files of the Dun & Bradstreet Corporation. The sample size for each poll is about 750 small-business owners.

– Camilla Klein