The State of Small Business Compliance

Compliance often operates in the background of daily operations, but the time and attention it requires shape how business owners run their companies. As regulations evolve and businesses grow, compliance is becoming a larger and more visible part of the small business workload.

Our survey of small business owners shows that for many, compliance is not delegated. It is personal.

Who’s handling compliance

For most small business owners, compliance responsibility sits at the top.

• 82% personally handle compliance themselves.
• Even among businesses with 50+ employees, 66% of owners still manage compliance on their own.

This hands-on approach suggests that compliance remains closely tied to ownership and oversight. In many cases, it is not treated as a back-office function but as a core leadership responsibility.

That visibility and direct involvement may reinforce owners’ sense of control, contributing to the high confidence they report in their ability to remain complaint

• 82% of business owners say they feel confident in their ability to stay compliant.
• 43% say they are “very confident.”

However, confidence is not evenly distributed and varies by stage and structure:

• Among businesses operating for less than one year, only 56% feel confident, and just 15% feel “very confident.”
• Solo owners are slightly more likely to feel confident, with 73% reporting confidence overall.

For many new owners, compliance responsibilities begin during the business formation process and continue building and evolving as operations expand.

Industry differences further underscore the role of structure and complexity :

• Cleaning services (95%) and manufacturing (93%) report the highest levels of confidence.
• Arts and entertainment businesses report the lowest, with 71% saying they feel confident.

Experience, operational structure, and regulatory complexity may all influence how prepared owners feel. Newer and solo operators as well as more nuanced regulatory environments may face greater uncertainty. 

How much time compliance requires

Confidence does not eliminate workload. For many, compliance consumes a measurable share of each month.

• 32% spend 11 to 20 hours per month on compliance-related tasks.
• 26% spend five to ten hours.
• 16% spend 21 to 40 hours.

For businesses spending more than 20 hours per month, compliance begins to resemble at least a part-time role, rather than an occasional administrative task. At that level, it can feel like directly competing with revenue-generating activities and strategic priorities. The amount of time required underscores the operational complexity involved and the ongoing effort needed to keep up with evolving requirements.

Workloads are trending upward

Compliance workload is compounding — particularly for growing and already time-intensive businesses — rather than plateauing over time.

Nearly half of business owners report that compliance is taking more time than it did last year.

• 46% say their compliance workload is heavier than 1 year ago.
• 13% describe it as “much heavier.”
• Only 7% say it is lighter.

Those already dedicating significant time to compliance are more likely to feel the increase:

• 60% of those spending 21 to 40 hours per month say workloads have grown heavier.
• 55% of those spending 40+ hours report the same.

Among those who say their workload has grown heavier, these are the primary reasons:

• Business growth (66%).
• State or local regulations (45%).
• Increased enforcement (44%).

As businesses expand, compliance obligations often scale with them. New jurisdictions, additional employees, and expanded operations can introduce new reporting and regulatory requirements.

Those who report lighter compliance workloads told us the main reasons are:

• Better internal processes (46%).
• New state or local regulations (41%).
• New federal regulations (36%).
• Business decrease or stagnation (33%).

Together, these responses suggest that operational discipline and process improvements can meaningfully reduce compliance strain, even amid evolving regulatory requirements environments shift.

Looking ahead to 2026

Business owners anticipate that compliance demands will continue to intensify.

• Half (50%) expect their compliance workload to increase next year.
• Among businesses with 50+ employees, 73% anticipate an increase.
• By contrast, 36% of solo owners expect growth in workload.

Time investment today also shapes expectations about future demands:

• About 65% of those already spending more than 20 hours per month on compliance expect workloads to rise further.

Larger teams and growing operations may face more regulatory touchpoints, which can compound over time. Owners who are already deeply engaged in compliance appear to recognize that complexity is unlikely to recede.

For many, compliance isn’t just an occasional box to check; it’s a recurring and expanding responsibility that demands time, attention, and oversight. While most express confidence in their ability to manage it, nearly half report heavier workloads than last year, and half expect additional growth ahead.

As the workload increases, so do the stakes. Next, we’ll examine what happens when compliance falls short and how business owners are weighing the risks and consequences of noncompliance.

The Cost of Falling Out of Compliance