I interviewed William Osgood who discussed Regulations; Effects on Small Business.
Can you first provide a brief background of yourself?
First of all it’s a pleasure to be with you and I've been looking forward to this. In the area of regulations, I think the part of the background that makes it very appropriate is for the last nine years we have focused exclusively on this small business community. We’re a small business veteran advocacy. So we deal with all of the things that can affect the small business. And we know the stats, they’re really bad. On the percentage of small businesses that go out of business in less than five years. And that ranges depending on, I guess how optimistic you are about it. But the number we actually quote is about 95% of all small businesses don’t make it those five years. One of the things that helps to take them down is their lack of ability and being able to comply with regulations. So we’ve seen that firsthand and I believe this should be in cycle interview for your guest.
Can you talk about the regulations, the good and the not so good for small businesses?
I would put regulations into two categories. I would put those with really good intentions that don’t work and ones with really bad intentions that are really designed for other purposes. Most of the regulations by their very nature are designed to protect, either an organization or the employees, or the beneficiaries of some kind of product goods or service. So I would say that regulations by their very nature are designed to be good. Sometimes though what happens is in the enforcement of the regulation or the lack of clarity in how to understand this specific regulation can be very detrimental to a small business particularly.
Larger businesses can comply. They also have the resources to fight it. You know, to actually say, this is not good for business or this is not even good for the environment, or this is not even good for the employees. They have the where with alll to fight, whereas the small business doesn’t. A small business has no choice other than to learn compliance.We’re going to talk about that probably in the next segment. But that is the only way that a small business can actually survive. Then there are so many regulations sometimes that they can be overwhelming for the small business. I think from this perspective right away, I would learn the industry that you're in and learn the kind of regulations that are going to affect your business. Then ask questions like you would with a contract. Can we actually win this contract, or is this going to take more time, effort, energy and money then we could spend to win it?
I think you need to have those--that same kind of conversation for your particular business as to whether the regulations are going to overwhelm you, particularly if you're small business. One final thought on that when you actually look at those--look at the ones that can have a positive impact on your business, I would go so far as to say most OSHA requirements for example are actually good for our companies as long as we protect our employees and we teach them safety, and we focus on safety. Our employees are going to be safer, and we’re going to be protected from the Department of Labor or any other agency that’s being implementing their OSHA requirements, same thing with Workers Comp, or whatever it might be. So when we’re in compliance then that actually is good for business. For example in construction we’ll get a safety rating and our EMR rating goes up to safer, we are on jobs, meaning that more agencies, more government--pardon me, not government contracts but a government contracting agencies will want to do business with you because we have a good safety rating. So that’s kind of how I would put an overall perspective on regulations. We just have to be aware of the regulations that affect our business before we decide how deeply we’re going to go into that business.
How can business owners effectively implement these regulations?
Yes, that’s another good question. Thank you. So one of the things that is--just segwaying completing on our last statement of how a business can successfully--become successful by executing the specific regulations is number one. This is probably most important of all. As I said earlier being aware of what they are and knowing the type of agency, and the type of regulation that’s going to affect your business.
For example, if you're in trucking, you know that you're going to have Department of Transportation, you're going to have Department of Motor vehicles in your state, you're going to have the Environmental Protection Agency, and you're going to have the California--or the Highway Patrols in your state, that are going to be affecting your business. So you have to be aware of the types of regulations that will come down. If you then build your business model to be complaint with those and inherently within your business model from the very outset of the development of your business model those regulations are being complied with. You have somebody, hopefully on your team or in your company that focuses on being a compliance officer.
I think that’s probably the second major thing, having a compliance officer. I’ll give you another example, with the United States Army Core, when they issue a contract, a construction contract, they require three individual compliance people to be on the job site. One is a simply a safety officer, the second one is a compliance officer, and then the third one is somebody who is actually interfacing with all of them and making sure that the contract is being executed according to the terms of the army core. So if you're aware of that, when you compete for that job they know you have to pay for those people so you can build that into your bin and you’ll be in compliance with the United States Army Core. So there’s an example of being ready, prepared, and then having the necessary personnel who are experts in that.
I’d say the third and final thing then is that, if the regulation becomes overwhelming or overbearing you actually have a couple of options and one of them would be to evaluate whether the specific type of job that’s being regulated is a job that’s really worth pursuing. Sometimes you can avoid a regulation by not pursuing a specific type of job. Or you could actually relocate for the sake of that job if that--if the opportunity was a value oriented one that was significant enough to require or warrant to move, ie. opening another office where you execute a specific job out of that office and then therefore that job is the one that is being regulated as opposed to the entire industry.
Where have you seen success effectively dealing with regulations?
Yes. Going back to--that’s another good question. Thank you. So going back to our original statement, I really believe that most OSHA requirements, occupational safety are designed to protect our employees. So if we build into our business a core value that says, that safety is the most important thing on a job then we’re going to be compliant. So that means now that we can compete for contracts where safety is a critical issue. So we’ve had several success stories on our business for our clients in the construction industry, where they have great EMR ratings. They are automatically considered for opportunities because the custumer, whoever it might be, whether it’s utility or the government, really has safety as its primary concern, that’s probably number one.
Number two, I think the best success story is when you have safety for example as your primary core value on a job and your workers compensation ratings start going down and down and down and you're paying less and less and less, even though everybody else is paying more. So that’s both good for business and good for your customer and obviously for employees. And it’s really good for you because your employees stay safe, so you're not having to pay down time, or workers compensation claims but your also able to provide them with full employment opportunities and they make a lot more money when they’re working as opposed to when they’re not working. So everybody wins. The customer wins, you win, and your employees win. I think those are probably the two greatest success stories across the board. I could probably give you some specifics if we had enough time but I want to make sure we’re pretty timely here.
Thank you, William for sharing today. We could always do another follow-up Interview to go into these specifics.
Sure, I’d love to do that Dustin. Whenever you're--whenever you’d like. I enjoyed talking about small business. I enjoyed talking about the benefits, too small business and the opportunities that are out there in both the public sector and the private sector. So I would thoroughly enjoy that.
About William Osgood
Member Board of Directors at The Jonas Project