UK law as it applies to small business enterprises is like the sea, as it applies to fish of all sizes. Employment law, health and safety law, environmental law and financial law, create the culture in which bad businesses drown and good businesses adapt, thrive and grow, creating wealth for the people involved in it and the UK economy as a whole.
The question of whether the Law helps or hinders small businesses is a common one, but as far as small business owners are concerned, it is an irrelevant question. Fish do not question the sea. They adapt to it. So it has to be with small businesses. They must keep informed about and in compliance with wave after wave of amendments and judgments in case law.
Complying With the Law Costs Time and Money
Everybody knows this, right? Small business red tape is just bad business per se, right? Or at least that is the political spin coming from the very politicians who pass all the laws in the first place. What is true, is that complying with the laws around small businesses does cost time and money. Some estimates put this cost as high as 14 days in every year for every small business owner.
Since the ‘letter of the law’ overwhelmingly reflects the ‘spirit of the law’ though, this is time well spent. Because preventing accidents and fires is good business. Because not discriminating in recruitment and employment, gets you the most able employees and that’s definitely good business. Because not polluting your local environment and conserving energy is good for your reputation and your bottom line. And since ‘ownership’ is nine tenths of the law, isn’t it good to have clarity and support around things like contract small print or copyright?
Make Small Business Laws a Handrail and not Handcuffs
There is no doubt that ‘red tape’ takes up a lot of time and time is money. This is particularly true when laws are changed or new legislation is put into effect. And don’t forget the penalty fines and legal costs that can add up significantly if small business owners fail to get it right. Ignorance is no excuse, as they say.
Smart business owners do not see the laws as a cost and a restriction on their activities and wealth creation. Rather they see them as protection and a guide to best practice in all areas of their business. In short, the Law is more of a handrail than handcuffs.
First impressions of business law can be that it was drawn up by people who know little and less about running a business. But it has been tested in practice over time to keep businesses safe from the illegal practices of customers, suppliers and competitors, the government and even on occasions partners and employees. And on the other side of the coin the Law will always aim to promote the health and safety of people at work, to protect the public at large and the preserve physical environment, in the face of exploitation by businesses.
Small and Micro Business Assessment
Small businesses are those with 50 or fewer employees and they can be affected by new or changed laws out of proportion, simply because of their small size. Before 2011 there was a moratorium on new business regulation, and since that time there has been an on-going ‘small and micro business assessment’ process. If this process finds that small businesses would suffer unduly because of new rules it ensures that they are exempt from them before the law is enacted.
To a large extent, the nature of a small business determines the level of legal effects. Some businesses, of necessity, are more regulated than others. The key point, if you are in business or thinking of starting one, is to do your homework and take professional legal advice BEFORE, during and after your start-up.
Some key aspects of small business life, you must consider;
- Licensing and registration. This is particularly relevant if you are making and or selling food and drink.
- Health and Safety. Nothing can kill an embryonic business quicker than an accident that harms employees or customers.
- Insurance. You must make sure your business is adequately covered in the event of something going wrong. Many types of insurance are a legal requirement.
- The environmental impact of conducting your daily business.
- Intellectual property. Both yours and to what extent you may impinge on the rights of others.
- Giving your business a name is not a straightforward thing either.
- Employment law and in particular the things you need to be aware of around discrimination on any grounds.
- Data protection in this Internet age can be a minefield without professional guidance.
So, there you have it. The low down on small business and the law.