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Business Bureaucracy

Entry 1646, on 2014-04-21 at 10:53:15 (Rating 2, Comments)

About three weeks ago my wife and daughter started a business partnership when they bought a cafe and are now owner/managers of it. It has been an interesting process because, while I only help by working there casually, it has shown me the pressures of being a small business owner.

Of course, I should emphasise that almost everyone suffers pressures of different types so I'm not trying to make a case that small business owners are a special case or are even particularly disadvantaged. For example I remember a senior bureaucrat in a large organisation lamenting the long hours he had to work. Yeah life's tough: he worked 70 hour weeks but so do a lot of us, but we don't get paid $400,000 per year as compensation!

Considering there is so much said about how small business is allegedly so essential to our economy I'm surprised that there isn't more done to make running a small business easier. The amount of paperwork my wife has had to do to get things set up, the amount she has had to pay various organisations for services of dubious value, and the number of regulations and business laws she has had to learn are truly scary!

Then there are meaningless rules such as Easter trading restrictions which make running a small business even more difficult. If people want to open during Easter why not let them? What relevance has some ancient festival celebrating spring and then assimilated by Christians for even more dubious purposes got to do with our modern society? Very little as far as I can see.

I have said in the past that business needs to be controlled so my dislike of regulations might seem to be hypocritical here. There are two points I should make about this. First, the major damage caused by commerce comes from big multinationals, not small or medium sized businesses. And second, if government (national and local) is going to require compliance with so many regulations they should offer free expert services to set them up for new small businesses. Inland Revenue does this to some extent already but it needs to be considerably extended.

I have considered becoming self-employed myself on several occasions but I've got to say what I have seen really puts me off. It's not that anything is necessarily extremely difficult, the problem is just the pure volume and the mind-numbing mediocrity of it all! I really just couldn't be bothered with it.

Comment 1 (3915) by Allan de Reeper on 2014-04-27 at 18:58:20:

Whilst there are a lot of regulations to be complied with. You need to understand why some of the regulations are in place. I don't know what the council people are like in Dunedin, but I have found that the council staff in Blenheim are very helpful. Our local council has set up a small business training organisation to assist those starting out in business. As you mentioned, Inland Revenue are a lot more helpful now than what they were ten or fifteen years ago. As an accountant, I feel that my role has to include being part of my clients management team, if they want me to be. I have seen a lot of the pitfalls that small businesses can fall into. Often they are the same things, regardless of the type of business.

Comment 2 (3916) by OJB on 2014-04-27 at 20:59:49:

Spoken like a true accountant! :) Thanks Allan.

I know there are reasons for every rule and regulation we have. My point is: are these reasons relevant, are they current, and and are they sufficient for the amount of work a small business has to put in to comply with them? It's OK for someone whose work it is to work with regulations to defend them, but some of us are trying to do something useful here! As Edison said: Hell, there are no rules here - we're trying to accomplish something.

Comment 3 (3917) by Allan de Reeper on 2014-04-27 at 21:40:22:

I hear what your saying Owen, but the trouble is that the non complying few make it so much harder for the majority. I don't agree with a lot of the regulations and rules that small businesses face, I think that the likes of Trade & Enterprise could put together a handbook for small businesses that explains why some of the rules have been put in place!

Comment 4 (3918) by OJB on 2014-04-28 at 09:45:11:

Well I have said in the past that I want to see controls put on the worst excesses of business so I can hardly now say that I am completely against rules and regulations! It is really just the number and complexity. I know its possible to get some free help or hire an expert like yourself, but when you are trying to get a small business set up all of that can be a big drain on both time and money.

Almost everyone seems to be against excessive regulations, including this government, but no one seems to be able to do much about it. I know a past VC of this university wanted to reduce bureaucracy here so he set up a committee to study solutions. He never saw the irony! And I have never heard anything about that committee again. Drowned in bureaucracy?

Comment 5 (3919) by Allan de Reeper on 2014-04-28 at 09:48:13:

The most effective committee consists of three members, two of which are absent.

Comment 6 (3920) by OJB on 2014-04-28 at 11:14:12:

Indeed, but only if the one remaining person isn't some sort of crazy megalomaniac. In that case the committee is effective, but in a bad way! They say the best form of government (or other leadership, I guess) is a benign dictatorship, it's so hard to find benign dictators though!

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