Businesses with a difference face regulatory challenges

Cultural differences, a lack of trust and language difficulties can present mid-sized businesses with unique regulatory barriers to growth not faced by most smaller firms, finds new research from the Better Regulation Delivery Office (BRDO).

Bosses of “diverse businesses”, which can include those run by people whose first language is not English, those from black and minority ethnic groups, women-only businesses or enterprises set up by recent migrants, were interviewed for BRDO by GHK consulting.

Results showed that their companies face unique challenges to growth, such as significant issues relating to port regulations, language barriers and a lack of familiarity with regulatory requirements.

Diverse mid-market businesses are usually concentrated in particular sectors such as services, retail, food and drink – markets with low barriers to entry for setting up in business, but which face more complex regulations.

They may deal with implied or passive differences in treatment as a result of inspectors not accounting for the cultural diversity of the business owner, the research found. Many respondents mentioned that local regulation is a barrier to growth for them.

Business minister Michael Fallon commented that better regulators are needed to support growth of mid-sized businesses.

“A good regulator can support and drive growth, as long as it is sensitive to cultural and other differences, and I want to encourage that,” he said.

“We know that providing a more tailored approach works. For example, businesses with a Primary Authority relationship – where businesses have a single point of contact for advice on regulation wherever they trade – can be better equipped to deal with regulatory compliance issues than those businesses who do not have the support this type of relationship brings.”

The research found diverse businesses are becoming a significant part of the economy, particularly in the SME sector, with immigration trends suggesting this will increase during the next decade. 

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