Why small companies need to think about processes

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Meet Jim the baker, who could be a kind of older uncle to Bob the builder. Jim is a role model baker that is featured in a “case study” on the website of the ISO. And he does everything right. According to one caption in the article, ¬†Jim the Baker follows a clear pathway to integrated MSS (management system standards) implementation and, by applying sound management supported by MSSs, his business expands to provide catering services for large organizations.

Implementing ISO 9001 or 14001 from the start might be a tall order for most start-ups. But I agree that including systems and processes in your strategy is the way to prepare for success.

Why processes?

Think about sales systems: communicating the need for a sales & customer service system will lead you to answer questions like: how is the sales process going to look like? What kind of data points do I want to collect? What will the main channels of communication be? You will not be able to answer all questions right away and it is a good thing to experiment with different solutions. Make sure that you don’t lock yourself in too soon. A simple Excel sheet with some conditional formatting will be enough CSMing for many start-ups during the first few months. If you want a web app, make sure it provides export functions via universally accepted standards like CVS or XML just in case you need to switch to a different solution later on. Keep your mind open and take as many notes about your chores as possible. These notes about all the little gremlins, hick-ups and screw-ups will provide¬†valuable insight in where the process is still troubled. The same is true for your accounting, your HR, etc. If your company grows – and you want it to grow – then you will need processes and standards defined for all of them.

Michael Gerber recommends an even more vigorous approach for every small business owner in his book “The E-Myth”: do every job in your start-up yourself first, starting from the bottom and work your way up. Note down all the necessary tasks and qualifications. Use these to define the processes and responsibilities for every position until you reach the top. The result will be a set of documents with clearly defined processes, procedures and check-lists that help you run your business. If you feel overwhelmed, look for a person new to your ranks or an external consultant. They will provide a fresh perspective on how things could be done.

Path to success for small businesses

Why is this especially important for start-ups and small businesses? Many people tend to think that business processes are for large corporations with thousands of employees and a legion of consultants at their disposal. Companies with a war chest. But the opposite is true. Big companies are the ones that tend to suffer more from byzantine approval procedures and strict guidelines. That is why they are forced to spend a big amount of money fixing these problems. If you consider processes and standards in the beginning, you can minimize problems in the future. Your company is still young, eager and flexible. Changes can be applied easily and quickly. So make sure to use this window of opportunity and to prepare for the moment when you roll out a mobile-based sales tool or train ranks of customer-service staff.

Another plus for small businesses with restricted cash-flow is the better allocation of resources. If you got your delivery routes worked out early or have your sales-force following a tested process, you will be leveraging tools that many companies only think about at a later stage, when problems arise. I remember the example of a client explaining why an online tool to manage their developers’ time did not work out: they scratched it when the time slots collided whith reality and needed to be changed frequently. But in the end, the meeting and work times had to be arranged somwhow. The result was that all employees resorted to multiple, hard-to monitor channels which led to confusion, wasted time and a lot of uncoordinated meetings.

So take advantage of your unique position as a small business owner! You know you want to expand (in sales, offices, staff, etc.). Prepare to scale up!

When you already did, please share your story in the comments. It would be great to get more insights!

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