Detroit City Wire

Small-business owners are facing increasing challenges with regulatory compliance, according to the MetLife and U.S. Chamber of Commerce Small Business Index for the fourth quarter of 2024. Approximately half of these business owners and decision-makers report that managing compliance demands excessive time and financial resources.

The index reveals a growing trend, as more owners this quarter compared to last year acknowledge that "time or resources spent on fulfilling regulatory compliance requirements has increased in the past six months." Key areas consuming their time include taxes, recordkeeping, payroll, licensing, permits, cybersecurity, and privacy issues.

To manage these tasks, 44 percent of small-business owners are outsourcing some work despite the financial burden it poses. A significant 69 percent say they spend more on compliance per employee than larger businesses do.

Regulatory challenges also impact business growth. The report states that 51 percent believe "licensing, certification, and permit requirements make it harder to grow their business."

Tom Sullivan from the U.S. Chamber of Commerce commented in a press release: “Too many regulations cause big headaches for small businesses,” even if they feel confident in complying or have outsourced these tasks.

Despite these hurdles, there is optimism about future prospects in 2025. More owners expect increased revenue, investment, and hiring compared to previous months. This positive outlook aligns with findings from a National Federation of Independent Business survey indicating high optimism levels among small-business owners.

Bill Dunkelberg from NFIB highlighted that the results align with expectations following the U.S. presidential election. Owners are hopeful for policies promoting economic growth and relief from inflationary pressures.

Sullivan anticipates that "concern over regulation will decrease" next year but warns that addressing inflation concerns remains challenging: “The tougher question … is whether or not the concerns over inflation will decrease.”