Governance in Small Businesses

 

 

 

Governance… Corporate term… Not applicable for me as my business is small and innovative. We’re starting out. Plenty of time to add bureaucracy later!


Right…?
Governance isn’t just about adding red tape to your business and making it harder to get things done. Governance is about taking a step back and looking at the big picture. It’s about working on a business, rather than in a business. It’s about creating a framework for long-term success.


The businesses strategy, people structure, and agreed processes on how things should be done and who is responsible for what all form part of governance.


Often, the governance of an organisation is developed as a reaction to issues faced; even the most seemingly desirable situations, such as rapid sales growth, can test existing business processes that up until that point were working fine.
The challenge for the small business owner is developing Governance to support their business BEFORE it becomes reactionary; before issues they face cause slow or poor decision-making, a reduction in customer service levels, or poor stock management amongst numerous other potential issues.



The good thing for small businesses is this doesn’t need to be complex to be effective. Small business doesn’t need a lot of formal structure, but there are some basic governance principals that are relevant and helpful.


Principal 1: Have a strategy and have everyone in your business know it
Whatever your businesses strategy it won’t be effective if no one knows what it is. The strategy will help guide day-to-day decisions and issues you and your employees may face. When faced with conflicting goals your strategy will enable you to prioritise.
The strategy doesn’t need to be a 50-page document no one reads. Have it on a page, on the wall. Talk about it often. This is what your business stands for after all.


Principal 2: Track business performance
From your strategy develop your Key Performance Indicators, and most importantly track these. Decide in advance what the escalation process is if these are not met. Create a plan and stick to it.


Principal 3: Regular meetings
Sit down with your team on a regular basis, weekly if possible, to discuss what they are working on and any issues they are facing. This will provide the business manager and employees a forum to know what is happening in each part of the business. It not only allows you to identify potential issues early but also creates an opportunity for collaboration and joint problem solving. These meetings don’t have to be long. Keep to 30 mins – an hour.


Principal 4: Don’t be afraid to delegate

There are simply too many decisions to be made in a business each day to have the SME owner or operator oversee each and every one. Delegate decision making to your employees and you’ll not only empower them but you’ll also enable the business to be more agile. Create role descriptions, which let everyone know exactly what each role is responsible for and who to approach when a decision needs to be made.


And there you have it. Simple governance processes for the SME that allow you to get on with what you’re there for, making sweet business.

 

 

 

 

 

 

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