Study Shows Businesses Struggling with Government Compliance

Government regulation continues to plague small businesses despite Federal efforts to reduce the time needed to meet the demands of compliance, according to a study by the Small Business Research Board (SBRB) released today.

The SBRB report, co-sponsored by International Profit Associates (IPA), said 88% of the small business owners and managers responding to the nationwide survey are finding it takes more time than it did two years ago to comply with government regulation. IPA, with more than 1,800 professionals, is the largest privately held provider of management consulting services to small and medium-size businesses in North America. IPA is based in Buffalo Grove, IL.

Among seven leading industry segments, more construction and contracting businesses are being impacted with 93% indicating it is taking them longer to comply than two years ago.

Categorically, 92% of the operators of businesses in the transportation industry said they were spending more time to comply, finishing a close second to the construction and contracting firms.

Other industries in which government regulations are eating up more time include: automotive and retail, each with 90%, distribution / wholesaling businesses at 85%, manufacturing companies at 83% and food concerns at 80%.

The study coincided with the fifth anniversary of the signing of Federal regulations designed to reduce the stress caused by government compliance requirements. The Small Business Paperwork Relief Act of 2002 (SBPRA) was enacted June 28, 2002 to ease the burden of Federal paperwork on small businesses.

"Various studies conducted between 2000 and 2004, including those by the task force as well as those completed by the U.S. Chamber of Commerce and the National Federation of Independent Businesses identified the source of the problem as well as its financial impact. The SBRB report clearly demonstrates that the vast majority of companies are putting more time into compliance, not less," said Gregg Steinberg, President of IPA.

For fiscal year 2003, for example, the OMB estimated that businesses and citizens spent approximately 8.2 billion hours and $320 billion dollars to collect and submit data to the federal government. The Federal government has more than 8,000 separate information collection requests authorized by the OMB.

According to Small Business Administration reports, small businesses represent more than 99% of all employers and in turn employ more than half of private-sector workers.

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