By Viresh Harduth, Vice President, Small Business, Sage Africa & Middle East
As the owner of a small and medium business (SMB), you are the backbone of the global economy. With a company evolving from small to medium-sized, you may be used to keeping things simple and casual. You might be using spreadsheets to do your payroll and accounting, generating invoices on Microsoft Word, and conducting performance reviews over a cup of coffee with each team member.
The last thing you want to do is get bogged down in many systems and controls that restrict your speed and flexibility. But the reality is that when a business reaches a certain size and complexity, it will need to formalise its processes and systems to grow and thrive.
As your business grows, you will start facing higher customer expectations and more regulatory compliance demands. To live up to them, you will need to put suitable software systems in place, begin documenting policies and formalising business processes to ensure productivity and reduce the risk of reputational damage.
An opportunity to improve your business
Formal processes and systems are key to SMB resilience, supporting SMBs to streamline compliance and admin that takes up a lot of time. Another benefit comes from gaining better visibility, more business insight and control over your organisation’s finances. It can also be good for employee morale because people will feel confident about their purpose and responsibilities. Furthermore, formal business processes will help you improve the quality and consistency of work in your business, with positive spinoffs for productivity and customer service.
Here are three signs it’s time to formalise your business processes:
- Your revenues and team are growing rapidly
As business gets bigger, your responsibilities in legal and regulatory compliance will grow. Once you start reaching higher turnovers and a greater workforce, it will start becoming increasingly unsustainable to operate with informal policies, loose structures, and manual systems and processes.
Managing a business through paperwork or informally chatting to employees becomes unsustainable and impractical you grow, especially in this time of flexible work. To remain in control, you’ll need to do things in a standardised manner and ensure that you can monitor financial and operational performance. Formal processes and systems are also essential to HR functions such as performance appraisals, succession planning and career paths.
- Your business is multifaceted
If you’re running a complex business, operating in several geographic locations, or working in a heavily regulated industry – for example, certain forms of complex manufacturing or financial services – you may want to fast-track formalising your business processes. Your customers and funders will demand it, and you’ll need to have the process discipline to deliver accurate reporting, ensure consistent product and service quality, and monitor performance.
- You’re taking on the big players
If you’re business is competing against larger corporations, you will want your business’s processes and systems to be agile as theirs. Bigger organisations have economies of scale, established systems and robust business processes. Formal processes and systems are making it easier for SMBs to boost productivity, ensure staff retention, and deliver your product or service with a predictable quality level.
It’s never too early to put appropriate controls in place
If your business has survived to a point where you need to put more formal systems and processes in place, it’s a sign of success. See it as an opportunity to further ramp up your growth and achieve productivity. Documenting standards and procedures and automating processes can improve the lives of SMB leaders and its employees, enabling leaders to build experiences that connect, remove friction and deliver insights.
The right tech will knock down barriers so everyone can thrive, giving you the visibility, flexibility, and efficiency to manage finances, operations, and people, as well as grow alongside your business.
About Sage
Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and Mid Sized Businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.
