However, the reality of life for the majority of small startups is that they are established with almost no systems or procedures in place, as they are often very small with the founder/s doing all the jobs themselves or, at the very least, overseeing them. Even many startups that are more than just the founders have no real procedures in place other than the very rudimentary ones regarding job roles for founders and any staff. Sadly, so many of these startups just never get round to taking the very necessary next steps required.

But what every business owner will learn sooner or later, is that what works in a small startup simply does not work as the business starts to scale. It is typical for startups to be continually firefighting and doing many things in no particular order, other than that they have become urgent. Not only is this vastly inefficient, but this system of working means that the founder or directors never get to follow a well thought out plan, and the business itself will suffer accordingly.

A very early stage business or a one person operation can get away with operating in that fashion as there are typically not many people involved and not too many moving parts to keep an eye on. But as a business grows in size then inevitably so does the complexity of it, as it takes on more staff and the number of moving parts to try and coordinate grows. What was once possible, becomes less and less so, and steps need to be taken, not only to ensure that the business is able to operate efficiently at the present point in its growth, but also so that it will be well placed for future growth.  

All of this leads to the need to set up proper systems and procedures for how the business operates. Whilst setting up such procedures does of course take some time initially, once in place they not only save considerable time over and over again each time certain actions or activities are undertaken, but they also guard against errors and the need to constantly firefight – thus saving money.

It is also much easier to establish systems and procedures when a business is in its infancy and its operations are relatively simple. The later this decision is put off, and the larger and more complex a business grows, the more difficult, time consuming, and expensive it becomes to establish such procedures. Not only that, but in the meantime the business has been operating inefficiently and inevitably taking higher risks than it should have been.

Every good business needs good corporate governance, and whilst there are many different aspects to corporate governance, having good systems and procedures in place should certainly be seen as being one of the foundation stones. So, if your business is one of the many that do not have any such procedures already in place, the only questions that should be asked is what is needed and how soon can they be established? Conduct a gap analysis, or better still arrange an outsider to do this, that will highlight all the shortcomings and then arrange to rectify them as a matter of urgency.

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4th May 2021