Posts Tagged ‘growwing your business’

Politics and Profits: Making Government Regulations Work for You and Your Business

Thursday, January 21st, 2010

IMG_2005.JPGThere is a trend towards increased government controls affecting your business and personal life. You can take two distinct actions while these new laws are passed. First, vote for those politicians having a history of supporting regulations you favor. Second, learn to turn regulations into profits.

To prosper in this environment of increased laws you will need to change your viewpoint and look for opportunities within these new regulations. While managing a seafood business was amazed at the many regulations we had to comply with. I became frustrated with the many rules and regulations, most of which I felt where ridiculous.

It was not until I changed my internal dialog that doors opened leading towards prosperity. Instead of complaining I began to ask myself a new question, “how can I profit from this new regulation”. This is when I discovered new ways to make the business more profitable. The following is a list of the methods you can use to turn government regulations into profits for your business.

  • Regulations decrease the ease of entry into your business and limits the competition. There are many regulations we where required to comply with in the food business. Licensing alone can cost tens of thousands of dollars, thus limiting the number of businesses that can afford to enter the new business. Less people able to afford the licensing fees equates to less competition. Less price competition enhances profit margins.
  • Regulatory compliance can eliminate competitors who don’t know the rules. I had a customer who stated on of the main reasons he worked with our business is because of our ability to comply with the variety of state and federal regulations. He had purchased some frozen lobster tails from an importer who was selling at a very low price. What he did not realize is the other importer did not comply with the various rules and did not have the proper permits to carry lobster out of season.

    One day local regulators from the fish and wildlife arrived at his warehouse for an random inspection of his seafood. Unfortunately, he had lobster in his freezer without the proper out of season documentation. This caused him to be fined over fifteen thousand dollars that day. After this expensive experience he decided to only purchase from us because of our expertise in out of season licensing. This began a long relationship with this customer simply because we understood the regulations and more importantly we knew how to comply with the regulations.

  • Invest in those businesses benefiting most from government regulations If you are looking to invest in a business affected by new legislation, it is important to investigate the lobbying groups and companies supporting these new laws. Find out why they are supporting the bill and discover if the bill was written with the possibility of increasing their revenue. This might be tedious work but can reap large rewards for you if you invest in the right type of business.

    A few years ago I investigated legislation which funded an alternative energy source. Government money was injected into this business and they where looking to reap the rewards. I thought I would try and share in their good fortune. Less than a year later I sold my interest at four times what I originally paid.

  • There is an old saying “when life hands you lemons make lemonade”. This axiom can be applied to many government regulations. As any business owner knows the only thing we can be assured of is change. I challenge you to think of this change in a new light. If you or your business is having to comply with a new local, state, or federal law, it as an opportunity. Investigate opportunities withing the new legislation, and turn politics into your profits.


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