The Institute of Management’s Mark Hastings explains how small businesses can manage regulation.
Regulations are complicated, convoluted, confusing and costly. Owners of small businesses, which are often set up to escape the bureaucracy of big company life, find themselves bogged down with forms and red tape without the staff to get through it.

Regulations are the bane of my working life. Why should I worry about them?

Some regulations have really made construction firms despair – most notably, the Inland Revenue’s Construction Industry Scheme for subcontractors, which is now under review. There is too much regulation overall, some of it ill-judged and antiquated. The government still has a propensity to fill every gap with a rule, to regulate first and ask questions later.

Of course, there are often valid reasons for regulations. There is obviously a place for stringent rules on health and safety in the workplace. Regulation tries to establish minimum standards for how society expects companies to act and behave.

But is it really any use to my business?

Remember, regulation is often there to help you. What happens if you don’t get the service you should or are sold shoddy goods? How do you expect to be treated by the people you do business with? What is your view on “rip-off Britain”? Regulations exist to protect you in all those circumstances. And much of it is about trying to create a level playing field for companies and the people who work for them.

If managed appropriately, regulations can actually improve the performance and competitiveness of your business.

How can they do that?

Take the new employment regulations on issues such as working time and family-friendly policies. Institute of Management studies and other surveys have found ample evidence that the stresses of today’s working environment are damaging individual productivity.

Improving the working environment actually increases staff commitment, enthusiasm and productivity, and can reduce the hidden costs of sickness and absenteeism. We sometimes start too quickly to add up the obvious costs of improved working conditions, rather than taking time to calculate the longer-term benefits.

How do I keep on top of all the rules?

You must make the time to build your knowledge. A wide variety of information is available – a good starting point is the Department of Trade and Industry.

At the beginning of April, the government launched the Small Business Service, dedicated to easing the burden of regulations and helping small firms raise finance. The service will begin delivering services under the Business Link brand in April 2001. Until then, local services will be provided by the existing Business Link network.

The new service has already had one success. After consultation with the SBS, the government has decided to remove the statutory requirement for a full audit for all companies with a turnover of up to £4.8m. The ruling is subject to parliamentary approval.

What else can I do?

Consider forming alliances with other small businesses in your sector or area – it can reduce the cost and spread the burden.

Also, communicate your concerns to the people writing the regulations. You can do this directly to the government, in particular through the Better Regulation Taskforce and the Small Business Service, or join a trade or professional body that will lobby on your behalf.

And don’t forget: as the CIS fiasco is proving, regulations are not set in stone. They can be overturned.