Compliance Risk – $45k Time Bomb – Can You Afford One?

Compliance $45k Time Bomb – Can You Afford One?

We can complain about all of the regulations our companies are subject to but our time is better spent ensuring that we have the proper policies, business procedures and other measures in place.

A company in the Atlanta area was fined $45,000 by OSHA for a variety of safety violations. Was it carelessness? Was it lack of experience and knowledge? Was it just “paperwork and regulation” that they did not have time for because they were focused exclusively on production and sales?

How much do they now need to sell to make up for that $45,000 off the bottom line? And how much in new sales do they need to make up for the expenses of the remedial work, lost productivity, additional training and the inevitable business interruptions from follow-up inspections? My guess – more than an additional $45,000. Perhaps $100,000? $150,000?

Some of the violations cited are Repeat Violations!

We tend to think about the “fun” things – the next big sale, the next big customer, the next big market, the next product. But there is so much regulatory risk out there. Burying your head in the sand is not an option for the long-term success and growth of your company.

Would a culture of risk management – of business process improvement, operational excellence and quality have avoided this situation? Not necessarily, but it would have dramatically reduced the odds of this blow to the company. And with proper procedures in place, the circumstances leading to the repeat violations may have been permanently fixed.

In some cases, a formal quality system such as ISO 9000 may be the best route. Learn a bit more: How does ISO 9000 Help Grow Sales and Increase Profitability?

[Ironically, the company is called Quality Industries. No, I am not joking.]

Maybe you don’t have an OSHA issue. Do you have one of these potential disasters waiting to happen? This is a rhetorical question – I guarantee you do. One of the first things I do with a new client is to review these types of risks and it is rare that a company has all of these under control. In fact, I often hear about past fines and citations, as well as things like “we know, but we just haven’t gotten to it yet.”

Here are just a few of the alphabet soup of agencies and laws ready to extract your cash:

• Sarbanes Oxley
• EPA – environmental
• Hiring & Employee Eligibility
• Foreign Corrupt Practices Act
• Privacy Laws
• Affordable Healthcare Act
• Department of Labor
• And on and on and on…

I hear it all the time: “But this costs so much to implement!” It could cost more NOT to implement.

A great way to balance the burden and create a positive impact on your top and bottom line is to extend the processes and procedures on these non-revenue producing requirements to all areas of your business. Weave the operational procedures in with the regulatory requirements in such a way that the regulatory costs turn into an investment for growth with a real ROI!

David Shavzin, CMC
[email protected]

The Value Track
Succession Planning / Exit Planning, Building Transferable Value for Sale
Atlanta, Georgia
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