All too often, small businesses imagine compliance with federal and state rules and regulations are the concerns of the big fish in the pond, that their noncompliance will go unseen, that sound compliance procedures and policies are not an essential part of the business build. But this isn’t so.
The smallest company can be reached by state and federal regulations, and a lack of compliance is exposure.
What might happen? Compliance irregularities leave a business open to third-party audits, lawsuits, fines and sanctions, and general jeopardy to people and property. Those are potentially huge, burdensome costs that can derail or completely take down a business.
Of course, it doesn’t have to be that way.
Here are some ways small businesses go off track:
- Simply not understanding regulatory requirements: Doing compliance, however essential, can be daunting. To fully understand the issues in your vertical on the local level, one might reach out to industry associations, trade organizations, or regulatory compliance consultants in New Jersey. For guidance regarding federal regulations, one might consult with an attorney.
- Sketchy processes, poor recordkeeping: Without accurate, complete records, it’s not possible to substantiate compliance. Attending to these matters after the fact, in catch-up mode, is rarely helpful.
- Employee training gaps: Employees have to be kept up-to-date regarding regulations that affect their job functions. Training should be reinforced periodically.
- Lack of risk assessment discipline: Businesses should be doing regular internal audits, identifying where risk is occurring, where they’re experiencing liability.
- All too casual compliance work: Sometimes companies rely on off-the-shelf compliance packages that are not responsive to their unique situations, or they may use out-of-date forms and posters regarding regulations, which are useless. These forms are usually free and downloadable, so it’s a simple matter to update them.
- Faulty data security management: If you’re handling private consumer information like financial documents, credit card information, medical information and more, staunch cybersecurity is an imperative.
However unwieldy, compliance regulations are derived from perceived, known threats in your industry’s environment, so compliance thereto is self-protective. It also enhances your brand, as your improved overall security is felt by the target audience. Finally, compliance really can’t – or shouldn’t – be avoided. It’s an essential component of your business plan.