It is true. The cost of compliance is on the rise. And no other sector has experienced this more than the food sector.
The past few years have brought a number of changes to the law that has added to the requirements of each business. And where there are requirements, there are costs.
We have heard many stories from small food businesses across the country who feel they are struggling to not only navigate the new system but also to budget for the various costs associated. Some businesses have gone as far as to chuck the towel in completely.
Don’t let the cost of compliance catch you unaware!
The cost of compliance is unavoidable. However, the impact of these costs can be minimized by knowing what is expected of you as the owner of the business and planning ahead.
Here are the top 5 compliance costs all business owners need to plan for:
1. Food Control Plan – You can build this yourself or hire a professional and get it right the first time.
2. Record Keeping Resources – You have a range of options. Clipboards and paper or laptops and tablets. Think about whether a subscription to an online system like FCP Log or a more traditional approach is right for you and budget accordingly.
3. Staff Training – This can be managed one on one in-house or in a group by a specialist. Don’t forget to factor in staff wages for training sessions!
4. Registration – The cost of this is definitely unavoidable and how much it is will depend on which authority you have to register with. Budget $200-$500 for this.
5. Verification – This is another absolutely unavoidable cost and the price depends on what type of registration you have. If you are being verified by your regional Council budget for $400-$700. An independent verifier will cost more than this but may be necessary.
Once you have planned for the above costs it is important to recognize that there are other areas of compliance that are too often overlooked. I have listed the main ones below.
Don’t forget to plan for the upfront costs as well as the ongoing costs associated with gaining your A+/100% grading.
1. Evaluation of your Food Control Plan – This is only required if you need to develop a custom food control plan to be registered with MPI. Please check what kind of food business are you to decide if you need this. If you do require this you will need to budget $2000 - $4000, depending on where you are based and who conducts the evaluation.
2. Liquor License – The cost of this depends on which Council you apply to. You may wish to use an agent for this as the process is complicated. Budget $1500 - $2500.
3. Health and Safety risk assessments – Health and safety experts can be expensive but you can manage risk assessments yourself. There are templates available on Government websites. For example; https://www.business.govt.nz/risks-and-operations/health-and-safety/how-to-assess-health-and-safety-risks/
4. Pest Control Systems – Best practice is to run a quarterly system through a trusted supplier. Depending on the size of your business budget $100-$400 per quarter.
Electrical Safety Checks – Expect to pay $4 - $6 per electrical appliance checked. What is the average cost. More information on the costs of this can be found at here. (link to our test and tag page)
So how much will compliance cost me then?
As you can see there is not an easy, one size fits all answer to the question ‘how much will my compliance cost me?’ There are numerous factors at play including; where your business operates from, what kind of food you sell/manufacture and what the size of your business is.
It is easy to throw one’s hands in the air and say ‘I’ll worry about it later’, but this approach should be avoided.
Planning is key!
When mapping out each of your compliance costs it is important to keep the following three questions in mind;
Am I going to take care of this myself, delegate to a staff member or seek professional support?
What will be the unavoidable upfront cost?
Will there be any ongoing costs that will need to be paid?
Download our Compliance Costs Planning Sheet to get started with your planning.
Did you have any questions? Let me know! Pop me an email on firstname.lastname@example.org