Operations Management

Don't Wait for Small Business Inspections

Written by Andrew Goldman for Gaebler Ventures

Even if your business has not been inspected by an outside party, you should be proactive in meeting various regulatory standards.

One of the perceived advantages of running a small business is that you can fly under the radar of some major inspection agencies.

In fact, this is a false advantage. Small companies that believe they can ignore codes and industry standards are in fact jeopardizing their own future success.

I often see this pattern of skirting rules and requirements when consulting with small businesses. The answer I hear most often is "it will cost a lot of money to get up to code, and we haven't been inspected yet."

While this is true in the short-run, if your company plans on sustaining and growing it will have an inspection. The costs associated with failing an inspection and having to pay to expedite the conformance process can be exorbitant.

If you are not up to code and an inspection pops up, it can be a serious eye-opener. There are fines associated with failure to meet certain codes. In addition, you could be shut down due to serious violations.

Usually you are given a set time period to fix various violations. The cost of having to complete this maintenance on short-notice can cripple a small business, especially one with a limited cash flow.

Word of failed inspections can also leak out into the public and poorly represent your company. With such high stakes, it's worth being proactive in getting your business up to code.

First off, you should understand all of the inspecting parties that govern your particular industry and geographic location. There may be some standards that you do not apply until your company grows bigger. You should still be aware of these governing standards. There may be certain certifications that certain customers require. You may want to include these during your "getting up to code" process.

It's important to remember that "getting up to code" is not an overnight process. Certain repairs and overhauls can take weeks or months.

By being proactive you can manage these implementations on your time frame, which is extremely beneficial. You should be aware of the scoring process of the inspections. Find out which violations are most critical and address these first. Even if an inspection came while you were undergoing this process, they would cut you some slack since you've already begun fixing the problem.

Part of the "getting up to code" process will require changes to the way your employees operate. They may have to wear more protective equipment or document more processes. This will result in some increased costs. It's important to remember that these costs are worth the investment when compared to the costs of failed inspections and fines. Plus, personal safety and good manufacturing procedures should be a part of any company.

Your employees may grumble at these changes but it's important to include them in the inspection and "getting up to code" process. Set goals together with the employees and celebrate when those targets are reached. It's good practice to relay the importance and reasoning for "getting up to code."

There are reasons why various codes are in place. The improve safety for our employees and for our customers. In addition, many of the rules and regulations can have added benefits to our company.

Higher quality and better cleanliness can be direct results of the "getting up to code" process. It's worth getting up to code even if you're flying under the radar.

Andrew Goldman is an Isenberg School of Management MBA student at the University of Massachusetts Amherst. He has extensive experience working with small businesses on a consulting basis.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities

Contributors

Business Glossary