While many regulations serve a useful purpose (e.g., clean air and water), there is concern that the growing number of costly regulations is beginning to take its toll on small businesses. Consider the 2010 study by the U.S. Small Business Administration’s Office of Advocacy, which found that small businesses now pay $10,585 per employee annually, just to comply with federal regulations (see sidebar below). Add in local and state regulations, and those costs could go much higher.