Small Business Struggle to Keep Up with Regulations

MUNCIE, Indiana -- While Washington continues to pile on the regulations for small businesses, Main Street may not be able to keep up. Across the country, businesses in tight-knit communities are attempting to cope with a barrage of taxes and regulations that sometimes do more harm than good.

Restaurant owner Scott Wise in Muncie, Ind. says he makes four cents on every dollar and with new regulations as well as the implementation of the Affordable Care Act, that profit margin could get even smaller.

Wise, 40, opened Scotty’s Brewhouse in 1996, when he was 22 years old. Today, he is getting ready to open his twelfth restaurant in Indiana.

Wise says his restaurants operate under the same four-cent profit margin that is the industry’s average. Whenever new regulations are put into place such as the new healthcare law, it hurts the bottom line.

“It’s not like the rich are getting richer, it’s just a small thin margin for restaurants,” Wise said.

Wise oversees a total of 1,000 employees and says the Affordable Care Act’s employer mandate has impacted him indirectly. The mandate that requires companies with 50 employees or more to provide health coverage is set to kick in Jan. 1, 2015.

“There was a guy who wanted to open a Scotty’s with me, and he decided against it simply because it was going to put him over the 50 employee threshold and he would have to take care of health insurance. That’s kind of a bummer,” Wise said.

But Wise won’t let new regulations discourage his entrepreneurial spirit.

“As an entrepreneur and small business owner you want the government out of your business as much as you can, Wise said. “It’s something I have to deal with and I’m not going to complain about it.”

For other restaurants in the heartland, the impact of our national government’s regulations usually depends on one thing: size.

Vera Mae’s Bistro is an upscale restaurant located just a couple miles away from Scotty’s in downtown Muncie. Owners Kent Shuff and Steve Fennimore opened Vera Mae’s fifteen years ago and maintain a staff of 18 full-time employees.

“I don’t think an administration, either way, has had a significant positive or negative impact on me,” Shuff said. “Local policy will always have a larger impact.”

Shuff and Fennimore are comfortable with the current space that they are in and unlike Scott Wise, are not looking to expand. The new healthcare law has had “virtually no impact” on Vera Mae’s according to Shuff.

For Wise, the sheer uncertainty surrounding the new healthcare law is what has business owners concerned. The recent elections, which now pit a Republican-controlled Congress against President Obama, also cause  uneasiness.

“Time will tell, in 2015 and when this law goes into effect, I think you’re going see some places not make it because this is a whole new extent that they’re not prepared for,” Wise said. “Because it’s not just the costs of the healthcare, there’s even an administration cost where you have to have another person in your office administrate the whole piece.”

Vera Mae’s likely won’t be one of those places that Wise is talking about. Kent Shuff says they have continued to be a go-to place for locals and visitors alike, and business has been good.

“In the last 5 years, we’ve experienced a 5% growth each year. Considering what some businesses have gone through each year, I will take that,” Shuff said.

As small businesses continue to adjust to the new healthcare law requirements, among all the uncertainty Wise is still confident about one thing.

“I don’t need the government to tell me how to run my business, I can do it myself,” he said.

Wise does recognize the importance of adapting and progressing no matter what obstacles are thrown his way.

“If it means that I’m going to provide healthcare to employees and they’re going to be happier and like their job more because I’m doing that, at the end of the day, I’m still a winner out of it,” he said.

Each business has its own share of hurdles and setbacks, but as the government expands its reach into the healthcare industry, small business owners like Wise will have to continue to find ways to keep their employees, and their slim profit margins, happy.

“At the end of the day I still have 1,000 employees to take care of and it’s my job to figure it out.”