In order to help small businesses thrive the government should play a minimal role in private business matters

Small businesses need many conditions in place in order to thrive: startup capital, a suitable location and physical infrastructure, shrewd founders who can adapt to changing circumstances—and also, of course, customers. While, in general, a government’s hands-off policy towards small business can help small businesses by freeing owners from time-consuming and cumbersome regulations, it is also the case that some government regulations are needed to protect the public from unscrupulous business owners. This type of regulation not only helps the public but helps small businesses thrive by increasing consumer confidence in small businesses, as well as protecting ethical small businesses from unfair competition from businesses that break the rules.
The United States has one of the highest rates of entrepreneurship in the developed world—much higher than the rates in Western Europe. Why? In the U.S., virtually anyone can start a business. For about $35, you can obtain a business license, and then you’re officially in business. Hiring the first employee or two is also relatively simple, and some workers can be paid as contractors, which eliminates the need to administer payroll taxes. In contrast, in Western European nations where you need employment papers (and sometimes references) to even open a simple checking account, naturally, the regulations and paperwork needed to start an enterprise can be daunting. Furthermore, laws intended to protect workers mean that it is virtually impossible to fire anyone, which can be a real burden for a small business that simply cannot survive with employees who are not up to the task. The lack of regulation in the U.S. is a strong contributor to the burgeoning of small businesses in that country.
On the other hand, a pure laissez-faire policy would be disastrous for small businesses, as well as for society. Should we allow small businesses to sell “health cures” that actually make people sick, or car seats for babies that haven’t been through safety testing? Of course not—even if requiring safety testing puts a burden on small businesses. The safety of the public is important, to be sure, but public confidence is also important if small businesses are to have any customers. Furthermore, some small business owners (just like large business owners) practice racial discrimination, sexual harassment, and other abuses of workers, such as paying undocumented workers less than minimum wage. It is important for human rights to curtail these abuses; it also helps small businesses for the government to put a check on such practices, because then legitimate, ethically run businesses can compete on a fair playing field.
While this essay propounds a system of minimal to moderate regulation of small businesses, some might argue that the government has no right to intrude on the private dealings of businesses and their customers. According to this view, if someone wants to offer unlicensed cosmetic injections, and budget-minded consumers are willing to have their wrinkles filled with who-knows-what, then it is the right of both parties to transact as they wish. However, in developed nations, governments take on, at very least, the provision of services that individuals cannot provide for themselves—military defense, the creation of highways and other infrastructure, and the testing of food and medicine on a wide scale, among others. Individuals do not have the ability to test every can of baby food for botulism or to evaluate the credentials of a “doctor.” Thus, in industries in which human health and safety are at issue, some regulation is justified.
How should governments best help small businesses thrive? In some sense, the answer is that governments should back off and let people do as they will. In a free market, many small businesses will be launched, many will fail, and the best will survive. However, some government intervention is required to protect the public from dangerous products and harmful business practices. These regulations ultimately help small business as a whole by encouraging consumer confidence in these businesses