At What Cost?

Can the small business still afford to stay in business or even start up? This question comes up time and again as I talk with my peers, colleagues and friends these days. Many people with the entrepreneurial spirit are concerned their ideas and businesses can’t survive in today’s business climate and government-regulated atmosphere.

Can a person with a great idea or passion for a particular occupation really start up a business or stay in business if they don’t immediately sell the idea to a bigger entity or franchise the business with an outlet on every corner? It has become very difficult to make the American dream of owning your own business a reality. I can’t help but think about the cartoon my kids watched a few years back when Madame Blueberry went to the “StuffMart” to get everything  she needed for her Thanksgiving party!

Farmers and ranchers epitomize the small independent businessperson and directly feel the brunt of competition of scale and imposition of regulatory burdens. Even though the scale of the family farm has been forced to grow in recent decades, the business is still, at its core, a family-run enterprise that involves a set of parents and successive generations. The number of acres and livestock may have increased and the equipment is bigger; but the passion and attitude of the individuals producing the food is still the same as it was 50 years ago.

The burden to farmers and ranchers to comply with environmental regulations no doubt costs millions, if not billions of dollars annually. As an example, storage of all petroleum products and most farm chemicals now requires spill containment structures, an engineering plan for design of some of those structures and a written plan for how spills will be handled if they occur. Preparation of one of these plans can cost as much as $5,000, and depending on the size and materials used, containment structures can cost as much as $100 a square foot to construct. Is this appropriate?

Don’t misunderstand; I am not saying we shouldn’t protect our environment from harmful chemicals and spills. In fact, the baseline set of regulations implemented over the last 25 years has been an improvement and provides needed protections. All I’m saying is now and in the future we must factor in the actual costs versus the risks of contamination or harm.  Many of the current and proposed regulations only consider incidents of disease or mortality in health studies, and don’t take actual risk of exposure into consideration. The Environmental Protection Agency will flat out tell you they don’t consider costs when proposing new regulations.

In today’s global economy how can the small business compete when such a large proportion of the profits are being spent on compliance with regulations? I’ll say it again to be perfectly clear, some regulations to protect life and health are good, but when we go above and beyond what is truly needed we are crushing the independent, small, entrepreneur

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