South Africa’s small business failure rate of almost 80% within the first three years means the average entrepreneur’s chance of starting a business, growing it and creating much-needed jobs is painfully slim. This is why all business owners and entrepreneurs need to keep their finger on the pulse of a constantly changing regulatory environment.
When it comes to a business, compliance refers to the company complying to all laws and regulations in regard to how they manage the business, their staff, and their treatment towards their customers. Compliance ensures companies act responsibly.
The only way to reduce liability and business risk is to ensure your business is fully compliant from the first day you start operating.
Here are some tips to ensure your business is compliant, accountable and transparent:
- Understand your business. Make sure you understand the legislation and regulations relevant to your industry. Also make sure you understand why meeting legal obligations is important.
- Be proactive and keep up to date. Have regular meetings and plan well regarding compliance matters to ensure you don’t miss important changes, updates and dates for submission. Also ensure you have proper monitoring and evaluation processes in place for corrective measures.
- Have the right mentality and be responsible. To protect your business and save it from failure due to non-compliance, make sure you have a ‘tick-the-box’ mentality. Get your compliance right from day one to ensure your business is safe. It is your responsibility to follow protocol and ensure you meet the compliance requirements.
- Where possible, use online compliance tools to track and monitor regulatory changes. This is cheaper than employing a compliance officer in-house. As your business grows, you can consider employing a compliance officer on a full-time basis.
- Train your team. Make sure you educate your team to follow the rules and ensure there are open lines of communication. Have corrective action plans in place, in case.
Compliance in business has many benefits:
- Reduced legal problems. Being compliant decreases your risk of fines, penalities, lawsuits and criminal charges and even the shutdown of your business.
- Improved operations and processes. By ensuring you follow the rules, you can create a better working environment for your employees and ensure your business operations are safeguarded.
- Better public relations and marketing. If your business is fully compliant, you can use this as a marketing tool to attract clients. Potential clients will have confidence in your offering if they know you follow the rules. If your company is thrust into the public eye for failure to comply, there will be reputational repercussions.
- Higher employee retention. Compliance in business ensures your employees are protected. If employees feel they work in a professional, fair and safe environment, they are likely to stay with you.
- You are able to do business with government and parastatals. If your business is compliant, you will be able to take part in tendering processes and feature on the supplier database.