Entrepreneurs, how to play with the law to succeed in your business

In the United States, Ferrero and Nestlé have been breaking their teeth over rigid regulations regarding… chocolate eggs for years. Kinder Surprises – which contain a gadget that children love – are banned there by the authorities, who claim a choking hazard. And now a New Jersey SME called Candy Treasure has found the solution: an egg whose connection between the two parts is visible enough to encourage kids to split it in half and not swallow it right away. After three years of development of the product, the company has just received marketing authorization, compromising the courtesy of the Swiss agri-food giant. Such as what, contrary to popular belief, laws and regulations are not necessarily set in stone. By being a little creative, we can circumvent them, anticipate, mitigate, make them adapt. Or send them back for his benefit, as you will find out in the file “How to be successful by circumventing the rules” of the magazine Management currently on the newsstands (click here to consult the summary), included on Europa 1 , in the broadcast of Helena Morna, can be listened to here in podcast.

Banned in France? Start abroad… before you come back

Bending the rules, in the minds of many, is… a rule of thumb. Large-scale distribution is a good example. “Limited by law in its expansive policy of opening or expanding surface area, it invented Drives, these spaces where customers come to pick up their purchases and are not counted as commercial square footage,” explains Professor Christophe Roquilly rightly. But above all, the constraints of the French market have prompted the big brands to develop internationally. Starting its activities outside France, where the legislation is less restrictive, is also the strategy that DNCS (submarine manufacturer) is considering to market small underwater nuclear power plants, FlexBlue. The company expects a stir in France and in developed countries, where public opinion is sensitive to nuclear risks. The parade? Focus on less reticent countries and prove over time that the concept is safe.

Cross the yellow line before returning to legality

It is clearly not our intent to encourage you to outlaw yourself. “But in fact many companies are because they have a subjective interpretation of regulations,” says a lawyer. “Low margin sectors, caught in the low-cost spiral, are often tempted to cross the yellow line,” confirms strategy advisor Bruno Jarrosson. However, breaking the law is not a sustainable strategy. Daniel Marhely, co-founder of the online music site Deezer, was aware of this when he launched his activity in 2006, first under the name Blogmusik. If he has not infringed the reproduction right of musical works – his site does not offer downloads – then he has exceeded that of their distribution. He knew that sooner or later the Sacem (authors association) and the record companies would fall for him. However, starting out as a pirate turned out to be smart. He was able to test the potential of a completely pristine market at a lower cost. Subsequently, the success of the public and pressure from internet users allowed him to negotiate from a relatively strong position. And to pull the rug from among its rivals, positioning itself as the first legal online listening site. By staying illegal, competitor Radioblog Club burned its wings in a lawsuit it lost.

Anticipate developments to be one step ahead

This is called asbestos syndrome. When the ax of prohibition fell in the late 1990s, many companies went bankrupt, not anticipating. Yet it is well known: the best way to protect yourself from the law is to anticipate its evolution. How? By investing in legal intelligence. If they do not have the resources, SMEs can turn to professional associations to get information about future standards. If French law is hard to predict, European law is even more so. We can also be visionary by observing societal changes. When he took over his father’s Air Sûr (hospital air pollution control) company in 2008, Thomas Kerting felt that indoor air quality would become a major problem. In fact, two decrees, from 2011 and 2012, now require establishments hosting vulnerable populations – mainly children – to monitor air quality.

Fight to change the standard

Another possible way is to convince the administration to change the rules. The process requires a lot of determination if you don’t have the power of a lobby on your side. Jeff Squalli, the boss of Ecodas (machinery for sterilizing medical waste) knows something about it. Originally, his company supplied the textile industry. Lacking outlets, the engineer turned to the hospital market and developed a device capable of crushing and sterilizing waste. But he soon came across legislation that required the incineration of contaminated waste. Jeff Squalli first got preliminary permission from the Department of Health to test his machines, on the condition that he burn everything at the end of the chain. In this way he was able to demonstrate the harmlessness of his process and obtain approval. “If the regulations were so restrictive, it’s because the board had no other solutions than incineration,” he explains. His SME (6 million euro turnover) now has about twenty employees and a hundred representatives abroad.

Avoid the obstacle by adapting your business model

Too complicated, in your opinion? Another possibility is to get around the hurdle by adjusting your business model accordingly. As the American Hospital of Paris did during the launch a few years ago of its “check-up center”, which offers health checks to senior executives. Getting it approved by Social Security so that it is partially supported was a losing battle, as the preventive assessments are not reimbursed. Drawing the consequences of this analysis, the hospital opted for a different strategy: to sue the patients, or rather their employer, for the health of its high-flying executives. The formula works: more than 200 major French and international companies participate in the program.

Christine Halary

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Find the file “how to succeed by bypassing the rules” in Management magazine, currently on newsstands. Also in this month’s summary: an interview with Michel Sapin, the Minister of Labor, the portrait of the boss of the Airbnb site (renting site between private individuals), the decipherment of Blackberry’s comeback.

Find the file “how to succeed by bypassing the rules” in Management magazine, currently on newsstands. Also in this month’s summary: an interview with Michel Sapin, the Minister of Labor, the portrait of the boss of the Airbnb site (renting site between private individuals), the decipherment of Blackberry’s comeback.

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