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

In the US, Ferrero and Nestlé have for years cracked their teeth over inflexible rules about … chocolate eggs. Kinder Surprises – those that contain a gadget and that children love – are banned there by the authorities, who claim a risk of suffocation. And now a New Jersey SME, Candy Treasure, is finding the solution: an egg whose joints between the two parts are sufficiently visible to encourage children to split it in two and not swallow it at once. After spending three years developing its product, the company has just obtained permission to market it, thus burning the courtesy of the Swiss agri-food giant. Like what, contrary to what people think, laws and regulations are not necessarily carved in stone. By being a little creative, we can get around them, anticipate them, soften them, get them changed. Or return them to his advantage, which you will discover in the file “How to succeed by circumventing the rules” in the magazine Management, which is currently in newsagents (click here to see the summary), taken up on Europa 1, in the broadcast by Helena Morna, to listen here in the podcast.

Prohibited in France? Start abroad … before you come back

Bending the rules is in many people’s minds … a rule of thumb. Large-scale distribution is a good illustration in this regard. “Limited by law in its expansionist policy of opening or expanding the surface area, it invented the Drives, these spaces where customers come to pick up their purchases and which do not count as commercial square meters,” explains right-wing professor Christophe Roquilly. But above all, the restrictions on the French market have encouraged the big brands to develop internationally. Starting its activity outside France, where legislation is less restrictive, is also the strategy that DNCS (submarine manufacturer) is considering to market small submarine nuclear power plants, FlexBlue. The company expects an outcry in France and in developed countries, where public opinion is sensitive to nuclear risks. The parade? Aim against less reluctant countries and prove in that way over time that its concept is safe.

Cross the yellow line before returning to legality

We obviously have no intentions of forcing you to ban yourself. “But in fact, many companies are because they have a subjective interpretation of rules,” says one lawyer. “Low-margin sectors trapped in the low-cost spiral are often tempted to cross the yellow line,” confirms strategy consultant Bruno Jarrosson. Breaking the law, however, is not a sustainable strategy. Daniel Marhely, the co-founder of the online music site Deezer, was well aware of this when he launched his activity in 2006, first under the name Blogmusik. If he did not infringe the right to reproduce musical works – his site does not offer downloads – he violated the right to their distribution. He knew that sooner or later Sacem (the writing community) and the record companies would fall on him. Starting as a pirate, however, proved to be smart. He was able to test the potential of a whole new market at a lower price. Then the success of the audience and the pressure of the internet users allowed him to negotiate from a position of relative strength. And to pull the rug out from under its rivals by positioning itself as the first legitimate online listening venue. By remaining illegal, its competitor Radioblog Club burned its wings in a lawsuit it lost.

Expect development to be one step ahead

This has been called the asbestos syndrome. When the injunction fell in the late 1990s, many companies went bankrupt without 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 funds, SMEs can turn to professional associations to find out about future standards. If French law is difficult to predict, European law is even more so. We can also be visionary by observing societal changes. When he took over his father’s company Air Sûr (air pollution control in hospitals) in 2008, Thomas Kerting sensed that indoor air quality would become a major issue. In fact, two decrees, from 2011 and 2012, now require companies that receive sensitive populations – mainly children – to monitor air quality.

Struggle to change the standard

Another possible way is to convince the administration to change the rules. The process requires a lot of determination when you do not have the power of a lobby by your side. Jeff Squalli, the head of Ecodas (medical waste sterilization machines) knows something about it. Originally, his company supplied to the textile industry. Due to lack of business, the engineer approached the hospital market and developed a device capable of crushing and sterilizing waste. But he quickly came across legislation requiring the incineration of contaminated waste. Jeff Squalli was first given preliminary permission by the Department of Health to test his machines on the condition that he burn everything at the end of the chain. He was thus able to demonstrate the innocence of his process and obtain approval. “If the rules were so restrictive, it’s because the administration was not aware of any solutions other than incineration,” he explains. His SME (6 million euro turnover) now has about twenty employees and one hundred representatives abroad.

Avoid the obstacle by customizing your business model

Too complicated, in your opinion? Another option is to work around the hurdle by tailoring 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 the Social Services so that it is partially supported was a losing battle as the preventive assessments are not refunded. Given the implications of this analysis, the hospital chose a different strategy: to charge patients, or rather their employer, concerned about the health of its high-flying executives. The formula works: more than 200 large French and international companies are members of the program.

Christine Halary

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Find the file “how to succeed by circumventing the rules” in the magazine Management, which is currently in kiosks. Also in the overview this month: an interview with Michel Sapin, the Minister of Labor, the portrait of the head of the Airbnb site (rental site between individuals), the decryption of the Blackberry comeback.

Find the file “how to succeed by circumventing the rules” in the magazine Management, which is currently in kiosks. Also in the overview this month: an interview with Michel Sapin, the Minister of Labor, the portrait of the head of the Airbnb site (rental site between individuals), the decryption of the Blackberry comeback.

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