16 things keeping SME owners awake -7. I’m worried about red tape.

If there is one thing almost every business owner complains about, it’s red tape/bureaucracy/regulatory compliance. The truth is, unless you are prepared to get politically active, complaining about red tape is about as useful as complaining about the weather. Here’s some ideas about how to face the monster.

The first thing you should do is work out all the regulations and compliances that apply to your business and put the mahi into understanding what they are, what they cover and what you need to do to be in compliance.

If there is anything you don’t understand, consult someone who does. The place to start would be someone in a similar business who may already have figured it out, or if that’s not an option, go the regulatory body and seek advice. If that doesn’t work either, consult an expert in that field. You’re only looking for some clarity, so unless you accidentally unleash an expert consultant on actually “doing stuff” in your business, the cost should be small.

Visual aids can be a powerful tool. Once you’ve gained understanding of all the compliances and how they need to be fulfilled, get someone with a few skills in visual presentation to create a checklist for each that anyone can see and follow. It will also help with getting buy-in from the team if they see you are taking this seriously and there is a constant reminder.

It’s one thing for you to have the overview of compliances and regulations and that part shouldn’t be negotiable. But now consider hand picking team members from different areas of the business to become your subject matter experts on different aspects of compliance so it doesn’t all fall on you.

So much of compliance is about paperwork. Records are king, especially when you are needing to demonstrate compliance. When you have learned all the things you need to check off, ensure that someone in each area is documenting actions, improvements, failures and remedial actions. Health & safety is a very good example of the importance of record keeping – particularly around near misses and minor matters because having detailed records as suggested makes it easy to prove that you are working hard and diligently to be a continuously improving business.

Tedious though it may sound, the regulatory world is ever changing. Now, you might say that it changes at the speed of glaciation, but it does and you need to be on top of that. Make a point of subscribing to any content from regulatory bodies that telegraphs coming changes and what you’ll need to do to remain in compliance.

If you take my advice and have different people in different areas as the subject matter experts, bring them together as the compliance team who pool all their own knowledge and support each other in their individual areas so they don’t feel alone and lose momentum. Get them to report to you on a quarterly basis on change/progress/issues and you’ll find that you’ve created a team of experts who have the drudgery under control and that is for the good of your business.

The thing that makes most SME owners skin crawl is the thought of an external audit. Well too bad, because it is inevitable that it will happen somewhere, sometime. The most sensible way to be ready for this is to get your compliance team to do regular (unscheduled) audits in different areas of concern. They should closely mirror what an actual auditor would do so they are authentically valid and instructive.

As part of the compliance team’s responsibility, critical will be the ability to undertake occasional risk assessments that lead to remedial action. This is a skill that probably needs to be learned and if the skill doesn’t reside in-house, get some help. It will be surprisingly inexpensive if you are smart about it.

Increasingly there are technological tools that can help enormously in compliance. One example would be the GPS tracking devices and software fitted to company vehicles to monitor driving compliance for team members. There are many other examples, including the installation of proper ventilation in high dust/fume zones and air quality monitoring to demonstrate that team members are not being subjected to health risk. The more you look around, the more you’ll find and you get to make the choice about what you want to pursue and what you don’t think is worth it.

From personal experience, it’s hard enough to get compliance from your own team, but contractors are a whole different consideration. Often they will come from a different environment where standards are different. What you and your team need to be upfront and resolute about is that when they are in your premises or conducting work on your behalf, they must be compliant with your standards. Remember, you still carry significant liability even if it is someone from outside your business operating for you.

As discussed, a large part of compliance is a paper war. Make sure you know exactly when things are due and give it enough time to prepare your reports and documentation. I’ve so often seen businesses scramble to get compliance work done in a timely manner and at best the results are sub-optimal and inaccurate and that can prove expensive.

If you set out in the first instance to run your business ethically and with a focus on being fair and reasonable with everybody, your risk of getting caught up in compliance related problems is exponentially less than if you are either careless or deliberately pushing the boundaries.

Get to know peers in your industry. Sometimes, as an alternative to paying “experts” great wads of money to tell you how to be compliant, the wisdom of people in similar positions to you can make all the difference without costing you more than a cup of coffee or a beer or two.

With compliance often comes inspection or audit. There is no way out of this so you may as well accept it as being expected at any time. The most cost effective (and safe) way to deal with this is by assuming tomorrow is the day and being prepared at all times. Not only is it safer, it relieves a great deal of stress and anxiety because you won’t always be fearing the knock on the door.

I talk a lot about continuous improvement rather than revolutionary change. In this instance, I recommend that you actively engage with the things you need to comply with. If there are seminars or resources available that will help increase your knowledge and capability to navigate compliance, dig in.

If at any stage you would like to reach out and talk in more detail about any or all these issues, or even ones that aren’t mentioned, please call me on +64 275 665 682, email me at john.luxton@regenerationhq.co.nz or book a time to talk, either face to face or by Zoom. Any call will be free, confidential and with no obligation to do anything else.