Bill Gray
Control Concepts, Inc.
The thought of dealing with government regulations always gives me the cold sweats! As a business owner, I have never had a fun experience meeting with a regulator. From the local building inspector checking my office’s toilet seats, to a Federal employee telling me I will need to pay a $25,000 fine because I failed to send in the proper 401k form; not my idea of a good time.
I’m sure I’m preaching to the choir. We could probably all add to the “Greatest Hits of Bureaucratic Horror Stories.” Don’t get me wrong. Regulations have their place. But are we overly regulated? And how do small businesses best cope with the regulations?
I’m a member of EASA’s Marketing & Industry Awareness Committee, and we spent considerable time at our last meeting discussing the prospect of regulations. During the meeting, I kept thinking that we were spending a lot of time, energy and the Association’s money on items that are protecting our interests, but are not helping us grow our businesses.
Some of this time was spent on the
U.S. Environmental Protection Agency’s (EPA) proposed rules that would have had a very negative impact on a lot of our members. It seemed obvious that the proposed regulation of burnoff ovens was completely off the mark, but we know that common sense does not always prevail. Fortunately, after EASA spent untold hours explaining our case, the EPA exempted burn-off ovens in its final ruling. Once again, I felt frustration in dealing with a regulatory agency.
Not that all regulation is bad
Where I grew up is a good example of why regulations are required and necessary. I grew up in Pasadena, Texas, in the 1960s and '70s. The city was notorious for its pollution. When I was a kid, the saying was “the air is greener in Pasadener.” There are still many chemical plants and refineries in Pasadena, but the air and the water in the area are now much cleaner. How did the cleanup occur?
The EPA was formed in 1970 in the wake of elevated concerns about environmental pollution and the passage of the Clean Air Act (CAA). It was formed to be the enforcement agency of the CAA and, subsequently, other environmental legislation. I did a little research concerning the EPA and Pasadena. I could not find any articles praising the EPA for the cleanup of Pasadena. However, I did find many articles critical of the EPA; these were articles written by industrial groups and by environmental groups. In the articles, there was one theme that was repeated. Even though they were critical of the EPA, they preferred to deal with a central governmental agency as opposed to many local governments.
Federal regulations are easier for large organizations to deal with because they can concentrate their resources and efforts in Washington. How do we small guys handle U.S. Federal regulations? In a report entitled “The Impact of Regulatory Costs on Small Firms,” researchers at Lafayette University estimated that in 2008, U.S. Federal regulation cost small businesses with less than 20 employees $10,585 per employee annually. Think about that.The average small business with 10 employees is taking more than $100,000 off of its bottom line due to government regulations. This estimate was made before The Affordable Care Act passed in 2010. Who knows what the cost is now?
I’m sure I’m preaching to the choir. We could probably all add to the “Greatest Hits ofBureaucratic Horror Stories.” Don’t get me wrong. Regulations have their place. But are we overly regulated? And how do small businesses best cope with the regulations?
Fixed cost burden
A variable cost model as a business strategy shifts as much of the fixed cost burden to a shared basis with other enterprising small business companies, significantly reducing individual company fixed costs. Being a member of EASA is very good example of sharing the fixed cost burden. We share technical support, training, business consulting, networking, industry representation, etc.
I think every EASA member should be very proud of our Association’s work to save money for our members, such as our combined efforts to stop new regulations of burn-off ovens as mentioned earlier. Our members worked as a team by writing letters, connecting the Association with an experienced law firm, and sending a great group to an EPA hearing, etc. We as a group shared the effort to do what was right for our members, our members’ customers and the country.
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