It’s essential to your long-term success that you understand how important adhering to regulatory compliance is as an enterprise or multi-location business owner. Doing so can prevent things like audits and associated penalties, and it also enhances your business’s reputation. The more locations you have within your business, the more crucial it becomes that you’re implementing standards and procedures that serve as a baseline or guide for you and your employees. This not only keeps you out of any potential legal trouble but also allows you to manage your empire more effectively. After all, as an enterprise business owner, one of your main goals is to provide clients and employees alike with a cohesive, uniform experience at any location they visit. Let’s take a closer look.
What is Regulatory Compliance, Really?
Though the term "regulatory compliance" may sound daunting, it’s nothing to fear, and you’re likely aware of it on some level as a multi-location business owner already. But, as a refresher, it involves adhering to the laws, rules, and regulations that govern your industry and the geographical locations of where your business operates. These regulations are established by governmental bodies, industry associations, and other authorities. Compliance often covers various areas such as financial reporting, data protection, environmental practices, labor laws, and industry-specific standards. In the state of California, for example, it is required that all health studio contracts be in writing1. This means: Should you operate a gym, Pilates, yoga, or any other fitness-based business in California, this regulation would apply to you.
Be sure to research what the industry regulations are in your state, as they often differ by locale. This is best done through a quick web search, as most—if not all—states host their own .gov website that specifies the required laws for wherever you operate.
Important:
Should you have business locations in different areas or states, those locations must be compliant to the laws and regulations for those areas.
Why You Should Care
As an enterprise business owner, adhering to regulatory compliance needs to be one of your top priorities for several reasons, but here are the most noteworthy:
Legal Obligations: Various industries are subject to specific laws and regulations that govern their operations. Regulatory compliance ensures businesses adhere to these laws, avoiding legal consequences such as fines, penalties, lawsuits—and in extreme cases, jail time. In certain scenarios, your business may not necessarily receive a penalty. The investigation conducted by your local government body, however, could cost you significant amounts of time and money which could otherwise be utilized for growing and managing your enterprise business. On that same note, regardless of how many locations you may operate currently, a legal investigation at any one of them could be detrimental to your reputation as a business owner and professional. This leads us to the second key purpose for practicing regulatory compliance.
Reputation Management: Maintaining compliance helps build and preserve a positive reputation for your business. As we just briefly covered, non-compliance can lead to negative publicity, damaging your brand's image and eroding customer trust. Adhering to regulations demonstrates ethical business practices and shows that you care not only about your clients’ perceptions of you, but that you also value your image as a reputable professional within the industry.
Financial Accuracy: Many regulatory requirements are related to financial reporting and transparency, as you may know. Compliance with accounting standards and financial regulations ensures the accuracy and reliability of financial information, promoting financial integrity and stability. Investors, creditors, and other potential financial stakeholders in your business rely on accurate and transparent financial data. This means that non-compliance could lead to the undermining of the trust you’ve come to build with these individuals, thus diminishing your access to capital, funding, or other financial resources. Without these things, expanding your business further or even running your business on a day-to-day basis could become extremely difficult.
The consequences for non-compliance are unfavorable, but there are numerous strategies that you can deploy to prevent them from ever happening to you—most of which tie into what we’ve already discussed. So, how do you know if you’re in full compliance? Read on.
Am I Adhering to Regulatory Compliance?
Ensuring that your business is adhering to regulatory compliance involves a systematic approach to monitoring, assessing, and adjusting your business’s policies and practices. Some steps you can take as a multi-location or enterprise business owner to maintain regulatory compliance are:
Identify Applicable Regulations: Conduct comprehensive research to identify all relevant laws, regulations, and standards applicable to your industry and geographical locations. Again, this is best done via online search as most states have websites dedicated to industry compliance laws.
Establish Compliance Policies & Procedures: Develop clear, documented policies and procedures that address each aspect of regulatory compliance as it relates to your business. An employee handbook is a great place to start, since it’s going to be referenced by anyone employed at your business. Things like workplace safety and health policies, a code of conduct, or other things like attendance and leave policies can be included in an employee handbook. The use of an employee handbook would also prevent any possible non-compliance caused by new (and old) employees that you might not have direct interaction or communication with.
Regular Compliance Audits: Conduct regular internal compliance audits to assess adherence to the policies you’ve established and identify any potential areas of non-compliance. In most cases, it might be beneficial to utilize an external auditor, as they can give you an unbiased opinion on your business’s compliance. Remember, compliance regulations differ by state, so be sure to perform audits at each of the different regions that your business operates in. Ultimately, this strategy should serve as a quality check for the procedures and policies that you’ve put in place, which sets you up for fewer roadblocks in the future.
Documentation & Record-Keeping: There’s no such thing as being too careful when it comes to maintaining regulatory compliance, so be sure to keep accurate and up-to-date records of compliance activities, audits, and training that you follow at your business. This will aid in the prevention of legal investigations or unhappy stakeholders, which circles back to those core reasons of why it's important to be compliant in the first place.
What Do I Do Now?
Research, research, research. Maintaining regulatory compliance might sound cumbersome from a surface level, but the sooner you know what rules, regulations, and laws are required for your expanding business and the locations it operates in, the more confidently you can operate your enterprise.
Whether you’re looking for a scalable business management solution for your enterprise business or are simply ready to open your next location, we invite you to experience what a complimentary 30-day free trial with Vagaro has to offer you!
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