Make regulatory exemptions for businesses with shoestring budgets.
Children running lemonade stands may now be heading to the annals of history. Child labor laws, health inspections, licenses, and fees all make running such a simple business quite a difficult task.1 In many parts of the world, people are able to set up simple shops to peddle wares or services with no real hindrance from the government. Over-regulation tends to inhibit businesses, in fact, England has a special day where they seek to cut red tape so that businesses can be more successful.2
The issue in many more “developed” countries is that someone can't just invest a small amount of money into buying something in bulk and sell retail off their front lawn. They first have to get a business license, then find out what other random bureaucratic agencies need to be paid off before business can commence. As Steven Hayward points out in his article, it is bureaucratic “turtles all the way down!”3 He further describes how county agencies, that don't need to exist, create work for themselves and use their muscle to force various people, companies, and agencies to cough up money just to pay for their inflated salaries.
There are several classes of people that find it completely prohibitive to start a legitimate business due to the parasitical tendencies of government. One such class is the unhirable. Who are these people? You would probably first think of former felons, addicts, weirdos, and other undesirables. What about children, disabled, and elderly? Whatever they are, if they can't find a job, becoming an entrepreneur is another option. Maybe nobody will hire children because of labor laws and liabilities, why not let them earn some spending money by making something at home and selling it? Maybe nobody wants to hire an ex-gangster, why push him back into crime when he can start a small business?
Another class of people that may want to start a business, but find it would cost too much are the working poor. There are many working poor that have great ideas but can never convince people to help them achieve these goals. Due to their limited financial background, they aren't likely to be able to get a business loan. These people, who might have been successful, “retire” at government expense, because they never could earn enough to make it out of poverty. This is unacceptable.
While revenue is gained by issuance of permits and other bureaucratic fund-raising, there are other approaches to government funding, that don't eat into future profits. If only a small percentage of these nano businesses actually made enough money to move their owners into a higher tax bracket or even enable them to buy more things locally, thus spending more on sales tax, this would be a gain for the county. There should be some type of exemption for businesses that are extremely small or at least for their first year or two of being run.
Sure, a stranger may not want to buy food from a roadside stand that they know has been exempt from inspection. In fact, this is probably why travelers are wary of buying food in many developing countries, especially at roadside stands. On the other hand, most people are willing to eat at family and friends' houses, because they have seen inside their kitchens and know how safe the food will be. The same is true with many other products and services. When a nano business opens up, it is likely that only friends, family, and neighbors will frequent the business, in its early stages. As time goes by, strangers might stop in, because they see others frequenting the establishment and can see how well the shop is run.
California business law4 allows people to run massage businesses without having a Certified Massage Therapist certificate. In other words, being certified is voluntary5, but has its responsibilities and benefits6. Laws are changing due to fears that sex workers are posing as massage therapists. Local governments are beginning to make local ordinances that were proving prohibitive to Certified Massage Therapists, so the State chose to limit these laws for those that were certified.4 While California has had people giving massages professionally and safely for decades with only a business license, it appears that this is going to be a thing of the past.
Regulation may be a necessary evil, but it is naturally costly, and often, too costly for business start-ups. While regulation may protect those that are already successful, it prevents true competition and ingenuity. Require fair warning, but don't make new businesses jump through hurdles and pay the buy-in price to run, there are enough other forces preventing business start-ups from succeeding. Allow the unhirable, the restless, and those with grand dreams and empty pockets to become entrepreneurs and, at least have the chance to win the capitalist's lottery.
1Kain, E. (2011, August 3). The Inexplicable War on Lemonade Stands, Retrieved August 30, 2016 from Forbes: http://www.forbes.com/sites/erikkain/2011/08/03/the-inexplicable-war-on-lemonade-stands/#35692a3e2264
2Prist, M. (2013, October 1). Cutting Red Tape for Business Improvement Districts that Help Small Shops and Local Traders, Retrieved August 30, 2016 from GOV.UK: https://www.gov.uk/government/news/cutting-red-tape-for-business-improvement-districts-that-help-small-shops-and-local-traders
3Hayward, S. (2014, January 20). Bureaucracy in America Now Goes All the Way Down, Retrieved August 30, 2016 from Forbes: http://www.forbes.com/sites/stevenhayward/2014/01/20/bureaucracy-in-america-now-goes-all-the-way-down/#6fd25d80426a
4California Massage Therapy Council FAQ, Retrieved August 31, 2016 from: https://www.camtc.org/faq.aspx#professionals
5California Massage License Requirements, Retrieved August 31, 2016 from: http://www.massageregister.com/massage-license-requirements/california
6Assembly Bill no. 1147 (2014, September 18). camtc.org/FormDownloads/ca_bp_code_4600_4620.pdf
Writes about politics from a Conservative Libertarian viewpoint. While pushing for a government that is Fiscally Conservative and Socially Liberal, he personally appreciates the Socially Conservative lifestyle.
Copyright R. A. Welkin