What You Should Know About Getting Into a Highly Regulated Industry
If you’re considering starting a business in a highly regulated industry there are a few things you should be aware of. Unlike other businesses, these industries require extreme attention to detail. Mistakes can be very costly and potentially law-breaking. Here are some things to know before you get started.
Costs of Doing Business
When operating in a highly regulated industry, there are many costs to consider. The first are compliance costs. These costs usually involve anything related to making sure your business meets regulations such as salaries of employees in compliance, updating systems, or reporting. Compliance costs have been rising, making it difficult for some business to keep up. However, the costs of non-compliance are far steeper. Non-compliance costs include all fines and fees received for not meeting regulations. For perspective, compliance costs can be averaged as $5 million whereas non-compliance may cost you $14 million. Before you go into a highly regulated industry, make sure you’re prepared to handle the costs.
The most important part of having a business in a highly regulated industry is actually knowing the regulations. It is vital that you take the time to learn and understand all the regulations you will need to navigate. Granted, there are third parties who will review your operations, but you don’t want to be too dependent on someone else. Learn the regulations for yourself. These regulations can be related to a number of things, but many of them have to do with advertising. The cannabis and vaping industries meet heavy opposition on the advertising front. Many social media platforms heavily restrict or prohibit advertising for tobacco or vape products. This can make it very difficult to market.
Since there are so many regulations to be aware of, it can often take more time to operate your business. You need to make sure you are following all regulations and this often means checking with third parties before you move forward with anything. Marketing is an example of this. You need to have campaigns reviewed and approved. You also need to allow enough time for this approval to go through. It may be frustrating, but it just takes a little patience.
Whether it’s healthcare or the tobacco industry, working in highly regulated industries can be risky and frustrating. There are numerous costs and regulations you need to be aware of. It’s essential that you take all of this into account before getting started.
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