Small business optimism is increasing by the day. Entrepreneurs have entered 2021 with increased confidence regarding their small businesses. While some news headlines forecasting doom-and-goggle for the global economy in2019 are certainly expecting such doom, the cautious actions of small business entrepreneurs do not reflect that pessimism. Instead, they continue to devise extensive plans for expansion, investment, and new hires in the coming year.
For many of the entrepreneurs, it appears that they will have one set of regulatory infrastructure in place. That is to say, they have one set of regulations for their small businesses that must be followed. In addition, they have another set of regulations for other aspects of their business operations. Thus, they have one set of books and policies pertaining to transactional issues and another set of rules that apply to executive-level conduct.
The thrust of their attention has been directed towards three areas: online business laws, regulatory reforms, and entrepreneurship guidelines. Since the inception of the millennium, entrepreneurs have recognized the need to address issues about e-commerce. Numerous small businesses have evolved online but have not been able to tap into the opportunities presented by the internet. That has resulted in the need for a comprehensive body of legislation that addresses issues related to e-commerce.
One of the reasons why online business legislation is so important is the enormous impact it has on small businesses. Without online laws regulating marketing activities, small businesses could face a variety of regulations and penalties. For instance, a seller in the United Kingdom could be penalized for not following the Sale Advertising Regulations. The regulations govern how online retailers operate.
Another important facet of small businesses involves taxation. Small entrepreneurs face the prospect of becoming subjected to tax increases, which may result from the European Court judgments against the UK’s tax regime. These judgments referred to the ECJ, which ruled that the UK government had failed to properly control tax, leading to an increase in the standard rate of tax for many businesses.
Another area where new entrepreneurs face regulatory uncertainty is the area of intellectual property. Many small businesses owners have large portfolios of ideas that they want to protect. However, there are few regulatory bodies in place to protect these inventions or innovations from unnecessary regulation. The result is a situation whereby innovation is stifled, leaving innovators with fewer options or having to invest large sums of money into legal costs to protect their innovations from the overbearing regulations of the UK market.
The lack of clear direction has been damaging to many businesses. Innovation is becoming increasingly difficult to achieve given the lack of standards. There are numerous reports that the number of patents granted is now at a record low. In response, the UK government has issued a series of documents and policies designed to promote and protect the commercialisation of innovation. However, despite this encouraging start, progress has been slow to follow.
There are many challenges that will be faced by small businesses in the coming years. The best advice that any budding entrepreneur can follow is to stay abreast of the market and the regulatory processes that will affect their business. By taking an active role in creating a clear direction for the business, entrepreneurs will be less likely to be caught out by the current uncertainties.
Many issues have been highlighted in the past two years regarding the regulation of the economy. Two particular areas where entrepreneurship should take a step back are the high cost of private health care and the prohibitive costs of independent healthcare provided by the state. Many government organisations have been charged with the responsibility of ensuring adequate healthcare and social care is available for all citizens. For small business owners, it is important to recognise the importance of investing in professional health cover. This not only provides employees with a secure economic base but also allows business owners to reap the rewards of appropriate health coverage.
The third area where the entrepreneurial spirit needs to run amok is in the area of the Employment Rights Act. Under the last government, there was very little regulation of employment and therefore the burden of the regulations fell heavily on the shoulders of business owners. It has been proposed that the UK’s employment laws will be reformed through the introduction of a new regulatory system known as the ‘Employment Rights Act. However, progress has been slow and some key factors mean that the introduction of the new legislation will not likely occur before the end of this year.
These three areas represent the largest challenges facing small businesses in the current digital economy environment. In order to avoid these pitfalls small businesses need to be proactive and they need to embrace the opportunities that government regulations present. The success of small businesses depends upon their ability to work with both state and federal governments. The establishment of a working relationship with the regulatory bodies is the only way in which entrepreneurs will be able to ensure that they benefit from the benefits of both the private and public sectors.