How Does Public Policy Affect Small Businesses?

Public policy is the foundation for business creation, growth and overall economic prosperity. At its best, it can be helpful to the entire state and expand that success onto the national level. However, poorly planned public policy can cripple businesses, destroy jobs and inhibit small businesses’ ability to succeed.

The U.S. Chamber of Commerce recently dedicated an installment of their State of American Business series to small business policy issues and their impact on state and national levels. Here are three takeaways from this discussion on public policy.

State Regulations Restrict Certain Businesses from Expanding

One of the biggest issues that small businesses are facing expanding is when regulations differ state by state. This can make it difficult for businesses to expand into other states, as they may not have the proper certifications or licenses to practice that business in another state.

This is an issue that directly impacts Melissa Bercier, founder and president of Couch Clarity, a psychotherapy practice based in Illinois. Because of the strict state regulations and licensing requirements, her team of social workers is only licensed to practice within the state of Illinois, prohibiting Bercier from scaling her business into other states.

“The regulations in each state are not portable,” Bercier said. “If a social worker would want to move to a different state and practice, or even if I, as the owner and supervisor would want to clinically supervise people in other states, I would also have to be licensed in those states.”

This is a common hurdle amongst many businesses, particularly in the healthcare industry, that advocates are actively looking to make changes towards growing business and gain more reciprocity in other states.

Lack of Broadband Access Inhibits States’ Competitiveness

Americans who live in densely-populated areas typically enjoy consistent access to broadband, mobile data coverage and high internet speeds. However, rural and remote areas of the country still have limited broadband access, which ultimately limits how competitive small businesses can be in these regions.

Katie Boyd Britt, president and CEO of the Business Council of Alabama, is looking to change this for her home state. Boyd Britt has been working with both public and private partnerships to get Alabama equipped in all areas with high-speed broadband. Having access to this would make Alabama more competitive in bringing tech jobs to the state since it already has low tax rates and housing prices.

“We have about 41% of our population that lives in rural communities and it's important that they have access to high-speed internet,” Boyd Britt said. “If we want to have a 21st-century workforce and 21st-century jobs, we have to have 21st-century infrastructure.”

Positive Change Happens When Business Owners Have a Voice in Public Policy

Until recently, the state of Louisiana has had a reputation for a legal climate that chased jobs away and raised the cost of consumer goods and insurance. Last year, with the help of Stephen Waguespack, president of the Louisiana Association of Business and Industry, Louisiana took major steps in addressing the needs of its citizens and business owners.

With COVID-19 shutting down the economy, Waguespack knew there was no time to get bogged down in politics, so his Association engaged with its constituents in a different way.

“We took a concerted approach and focused effort to bring our message directly to the people of Louisiana,” Waguespack said. “We want people to understand [public policy] impacts your insurance rates, this impacts your ability for a small business to stay open, to hire people, to invest in your community and we showed them how it works. We brought that message to the people… and they made their voices heard.”

Thanks to the efforts of the Louisiana Association of Business and Industry, the feedback from Louisiana business owners helped shape the state’s policies to better serve the small business community. It’s proof that when entrepreneurs are engaged and involved in the process, they can help create a regulatory environment that benefits them.