Regulatory compliance is the glue that holds businesses together. At least, that's the positive way to look at it. That's because few business owners will say that they like regulations, and for good reason.
“Regulations run our lives," says Mark Aselstine, owner of Uncorked Ventures, a San Francisco-based wine club.
“Interstate sales of wine is among the most heavily regulated things in this country," Aselstine. “Blame Prohibition and the resulting 80-plus years of state by state regulatory framework. Add in changing business models like my own... It's a complete utter mess."
When you have a lot of rules to remember, your world can get very confusing, not to mention expensive. If you're looking for better, more efficient ways to stay on top of regulatory compliance, you may want to try these strategies.
1. Hire a compliance officer.
The average base pay for a compliance officer, according to the employment website Glassdoor, Inc., is $78,203 a year. That is the average, of course—depending on the cost of living in your city, and how much experience your compliance officer has, you could easily spend more than $100,000 a year to hire one.
2. Hire a compliance agency.
In the way that you might hire, say, a human resources firm to handle your HR, you're outsourcing your regulatory compliance needs to another agency. Aselstine does this, and he says it runs him about $3,000 a month.
But according to Aselstine, it could be costlier
“I handle a few of the tasks myself, and it can scale up pretty quickly from there," he says.
3. Join an industry association.
You probably already have, but if you haven't, you may want to start thinking about it.
Alex Naoum is the co-founder of Alexander Paul Institute of Hair Design, a cosmetology school in Greenville, North Carolina. His company joined an industry association that has a dedicated staff to help keep track of and interpret regulations and regulatory changes.
“This is especially important if you aren't able to have a dedicated compliance officer in your company," he says.
Beyond standard business regulatory authorities, like OSHA (Occupational Safety and Health Administration), Naoum says his hair school is regulated by five regulators: the NC Board of Cosmetic Art Examiners, the National Accrediting Commission of Career Arts & Sciences, the U.S. Department of Education, the NC State Approving Agency and The U.S. Department of Veterans Affairs.
It may seem strange that the Department of Education and the VA would be involved with overseeing the business, but it is a school that offers funding and VA benefits such as the Post-9/11 GI Bill.
As you can imagine, Naoum has to keep track of a lot of regulations. But he says that the American Association of Cosmetology Schools has been able to help him stay abreast of everything.
4. Work with a consultant to help you stay on top of regulatory compliance.
Jonathan Wong, who owns Coastal Pediatric Dental & Anesthesia in Norfolk, Virginia, says that there are a lot of consultants available to business owners. Some of them will even work with you for free.
“For example, a fire marshal or building inspector may give you advice to help make both of your jobs easier," Wong says. “In fact, OSHA has a small-business program with on-site evaluation that will not result in any penalties.
“They often have checklists that will help ensure compliance with regulations," Wong says. He also suggests going to the usual research locations, like public and university libraries.
5. Take regulatory compliance seriously.
Whatever you do, and no matter how long you've been in business, you don't want to stop thinking about whether your company is in regulatory compliance.
Aselstine says that, at least in his industry, not paying attention to the rules can result in being on the receiving end of a lot of stress (to put it mildly).
“Some punishments for shipping wine over state lines come with jail time in some states," he says.
The consequences of not taking regulations seriously can be major—so you want to stay on top of things. Aselstine's compliance service sends him an updated list of dry counties and action being taken by state governments.
Which is why, like it or not, regulatory compliance could be thought of as the glue that holds your business together. If you're on top of the laws and legal tripwires that could bring down your business, your business will probably do just fine. But if you don't keep up, you may find yourself in a sticky situation.
Read more articles on operations.