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Business regulatory issues can have big financial impacts

There are a range of regulations that can apply to a business. These regulations can have many impacts on a company. This includes financial impacts.

For one, there can be a variety of expenses related to staying in compliance with such rules. According to the results of a recent National Small Business Association survey of small business owners, the average yearly cost (including direct and indirect costs) of maintaining regulatory compliance is around $12,000 for small businesses. The results also indicate that, for small companies that are just getting off the ground, their compliance costs over their first year of being in business can come in at over $80,000.

So, compliance costs can take up a fair portion of a company’s budget. Now, initially mishandling compliance matters could up these costs even more. For one, it could take extra time and resources to fix the errors such mishandling causes. So, handling compliance issues the right way can be critical for a business, both financially and in other respects. So, good legal guidance is something a company may want when navigating compliance matters.

And while staying in compliance with regulations can have expenses for a company, falling out of compliance can prove considerably more costly. Violations could expose a company to major fines and other serious financial consequences.

So, being accused of failing to comply with regulations can be a remarkably serious thing for a small business owner. What an owner does in response to such accusations could have lasting ramifications for their company. So, when in disputes with a government agency over regulatory compliance, a small business owner may want a skilled business lawyer’s advice on how to proceed.

Source: CNBC, “Small-business owners pay over $83,000 in regulatory costs in the first year, new survey shows,” Catherine Clifford, Jan. 18, 2017

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