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Government Regulations for Small Firms - Essay Example

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The paper explores the role government regulations play for the small firms. The main question to answer is whether government regulations of small firms are “much ado about nothing” or serve an effective instrument of managing small firms’ activities…
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Government Regulations for Small Firms
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Download file to see previous pages This paper illustrates that very often small business is positioned as small fish in the ocean, where only strong sharks can survive due to strict conditions, rapidly changing the environment and high competition. On the other hand, in the modern globalized world being an owner of a small business warrant the need to have a strong position to withstand the challenges and hardships in case business owners’ rights are not protected. Government protection is cited as one of the major prerequisites for achieving success and profitability in small business. Simultaneously, small firms are obliged to comply with the \ laws and rules developed by governments to assist economies and citizens. Unfortunately, even with the presence of sophisticated small business policies, the interests of small firms tend to be neglected; this is particularly the case of economies in transition. However, to understand whether or not government regulations benefit small businesses, the concept of regulation has to be understood. Regulation plays a crucial role in the market. Very often this role is diminished. There is a need to promote regulation in order to advance relations within the market and develop the market economy in general. Regulation should not be positioned as a restriction imposed on the performance of the small firms. On the contrary, regulations have the potential to positively affect small business performance. More often than not, firms claim government regulations to be an important impediment to small business growth. However, most of these claims are too general to be valid. Only 36 percent of small firm owners have been successful in identifying the factor that impedes their development, whereas the rest tend to blame governments just because they impose their rules on games on businesses.
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