Are regulations too tough for new businesses (Drew Angerer/Getty Images)

EPA Administrator Gina McCarthy speaks as U.S. Attorney General Eric Holder looks on during a press conference to announce a settlement between the U.S. government and Hyundai Motor Company and Kia Motors Corporation, at the Justice Department headquarters, November 3, 2014 in Washington, DC.

Regulation May Be Impacting New Small Business Formation

Government regulation is the most important issue small businesses face today. That’s according to 22 percent of businesses surveyed by the National Federation of Independent Businesses, leaving that group just one percentage point below those who said taxes were the biggest issue.

Is this impacting the ability for new businesses to form? Contracting businesses likely have a lot of opinions to express on this matter, as government bodies like the Environmental Protection Agency have made changes that have frustrated many contractors we have spoken with over the years.

Scott Shane wrote on Small Business Trends that rising regulation has been especially difficult for entrepreneurs looking to start a new venture.

Existing businesses often have experience in dealing with regulators and in complying with their rules, which allows them to find better and cheaper ways to manage the regulatory burden. Moreover, regulatory compliance often has a high fixed cost. As a result, smaller businesses (which tend to be younger) usually face a higher cost of adhering to regulations.

One idea is to limit regulation on new companies. John Dearie, Executive Vice President of the Financial Services Forum has suggested that Congress limit rules on businesses less than six years old to only “essential product safety, environmental, and worker protection regulations.”

We want to hear your thoughts: what do you think should be done about these regulations? Do you believe they are holding back new contracting businesses?

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