Late last year, ECSB identified a rising concern with government regulations among small business owners. Since then, additional regulations have only added fuel to the fire. The recently passed JOBS Act, in addition to the imminent Supreme Court decision on the Patient Protection and Affordable Care Act, is creating a great deal of uncertainty for business owners.
A recent Wall Street Journal article detailed the National Federation of Independent Business (NFIB) Supreme Court case against the mandate that all Americans carry health insurance. Provisions for tax credits for small businesses that provide insurance for their employees may help offset the burden for some owners, however others predict that the added cost of employee health coverage will force them to close their doors.
Whether good or bad, the added uncertainty surrounding the new law and political fear mongering generated in the press as a result is creating anxiety for owners. Last year ECSB determined that most businesses owners are not clear what impact the insurance mandate and accompanying tax credits will have on their businesses. In fact, less than a third of owners surveyed could correctly determine their eligibility for health care tax credits. Pending the Supreme Court decision, ECSB recommends that health insurance providers be prepared to help owners navigate the regulations.
Additional legislation in the form of the JOBS Act, which stands for Jumpstart Our Business Startups, is changing the very definition of small business in the United States. The JOBS act will allow for increased funding flexibility by increasing the cap on private investors from 500 to 2000, in hopes of allowing businesses to expand more rapidly before having to register with the Securities and Exchange Commission. While this opens the door to new sources of funding like crowdfunding, it also leads to more choices and tougher decisions for those owners looking to raise capital. Selecting the right financial services products or funding vehicle has never been more complicated.
At the same time, the Small Business Administration is redefining small business by revising outdated revenue thresholds. In expanding what is considered “small,” the SBA has increased competition for lucrative contracts designated for smaller firms, as detailed in a recent WSJ article.
It’s no wonder that business owners are confused and overwhelmed. While the true impact of these regulations on small business remains to be seen, the one certainty here is that owners need help to better understand and navigate the new laws. Companies that can translate policy and create clarity for owners will be poised for success as these regulations take effect.