A very great deal has been said in recent months about over-regulation as an economic impediment to American business success. Even Steve Jobs said before his death that ‘regulations and unnecessary costs’ have made it too difficult to build a factory in the U.S., pushing Apple like others to move its manufacturing abroad, according to the new Isaacson biography. Gibson Guitar has become tied up in the web of craft defeating environmental laws. Building power generation, transmission, and pipelines has become nearly impossible in the thicket of regulatory hurdles. Whatever your take on energy, it is crucial to economic development and growth. So, what about your business? Are you indeed weighed down by the costs and other headaches of excessive regulation?
A frequent source of business frustration and outright failure is a cost conscious hesitation — or refusal — to adequately consider legal complications and impediments which either increase the effects of flaws in the business model or are themselves flaws, and sometimes fatal flaws. The most obvious examples are failures to comprehend differences in laws of foreign jurisdictions when planning operations abroad.
But what about right here at home? Do you understand all the regulations which affect your business? Could you possibly? Do you even know how much is out there? Does anyone?
Try an exercise: with your staff, your accountant, and your legal counsel, build a spreadsheet of all the local, state, and federal regulations which affect your business day to day. Add in all the regulations which would affect you were you to try something new, something you have had in mind but have never planned all the way through. Then try to calculate the costs of compliance, from fees and taxes to be paid to the accounting and legal work which must be billed to you. What is the burden? What is the cost? Can you even complete the calculation with some degree of certainty?
Where do law and regulation intersect with your business model? Does existing regulation make it too difficult for you to work and to succeed? Do you spend more time and money on compliance than on innovation and expansion? Do your plans get lost in the confusion?
Failure is never just a matter of things being ‘set up wrong to begin with.’ Law changes, regulation changes, the operation of law and regulation on the business model changes, and the business model changes so as to conflict with law and regulation.
Where are you right now? Were the local regulatory snarl cut, would you take off and bloom in interstate commerce? Were state and federal regulations simplified and cut back, would you make and sell more, hire more, and pay better?
Study it. And let me know!
Steve Jobs Biography By Walter Isaacson:
Gas Pipeline To Manhattan Stirs Debate in Two States:
Guitar Frets: Environmental Enforcement Leaves Musicians In Fear: