What is a potential consequence of policy and regulatory changes for a business?

Policy and regulatory changes can significantly impact a business's operations and financial performance. One potential consequence is increased costs. This could arise from several factors, such as the need to comply with new regulations that require businesses to adapt their processes, invest in new technologies, or undertake additional training for employees to meet the updated standards. Compliance often involves both direct costs, like fees or purchasing new equipment, and indirect costs, such as lost productivity during the transition period.

While some changes might open up opportunities for market share, customer satisfaction, or new revenue streams, the immediate effect of regulatory changes usually pertains to the financial implications of compliance, which may lead to an increase in overall operational costs.