Why Small Businesses need Policies and Procedures

Running a small business is demanding. You juggle many tasks—managing daily operations, meeting customer needs, and training employees. In the midst of this, writing policies and standard operating procedures (SOPs) seems like something you can put off. However, taking the time to create them can help your business run more smoothly, stay compliant with laws, and protect you from risks down the road.

What are Policies and Procedures?

Policies are broad guidelines or rules that explain how things should be done in your business. They reflect your values, legal obligations and your overall direction. Common policy topics cover areas such as workplace safety, compensation, remote work, employee conduct, and equal opportunity and diversity.

Procedures or SOPs, on the other hand, are specific, step-by-step instructions on how to carry out tasks or follow a policy. While policies set the expectations, procedures explain the actions required to meet those expectations.

For example:

Policy: “All customer complaints must be handled quickly and professionally.”

Procedure: “When a customer complaint is received, respond within 24 hours, gather details, offer a solution, and escalate if needed.”

Clear Expectations and Consistency

Having policies and procedures helps ensure that everyone in your business knows what’s expected of them. Without clear guidelines, your employees might handle the same situation in different ways, leading to confusion and mistakes.

With well-documented processes, employees will follow the same steps, leading to more consistent results. For example, if you have a policy on handling refunds, employees can follow a standardized procedure every time, ensuring consistency across the business. This improves both employee performance and customer satisfaction.

Legal Protection

In today’s world, businesses face many legal risks. Whether its employee behavior, safety concerns, or customer disputes, having written policies can protect you. Policies help you comply with regulations and show that you’ve made an effort to follow the law. In case of a legal challenge, having these policies in place can demonstrate that you’ve acted responsibly.

For example, if you have a clear anti-discrimination policy and a process for handling complaints, it helps reduce the risk of legal action. Additionally, documenting safety procedures can protect your business if an accident occurs. Always make sure your policies and procedures follow WorkSafe BC Guidelines and BC Employment Standards. It is recommended you seek legal advice to review policies and procedures to ensure you are compliant with these laws and others that may be relevant to you business.

Easier Employee Training

Training new employees takes time and effort. Policies and procedures make this process easier. When you have written guidelines, new hires can learn exactly how to do things without needing constant supervision.

Clear SOPs also help employees understand their roles faster. For example, a new employee can read the procedure for handling a customer service call and know exactly how to respond, rather than trying to figure it out on their own. This not only saves you time but also helps new employees feel more confident.

Business Continuity

As a small business owner, you might be the one in charge of everything, but what happens if you’re unavailable? Whether it’s due to vacation, illness, or an emergency, having policies and procedures ensures that your business can continue operating smoothly even without your direct involvement.

For instance, if you’re out of the office, a team member can follow the procedures you’ve set in place to handle orders, customer complaints, or emergencies. This way, your business doesn’t come to a halt because no one knows how to perform key tasks.

Increases Efficiency and Productivity

When everyone knows what to do and how to do it, tasks get done quickly and with fewer mistakes. By establishing clear guidelines, you make it easier for employees to focus on getting their work done, without having to stop and ask how to handle every situation.

For example, if you have a detailed procedure for processing a return, employees don’t need to waste time figuring out the steps. They simply follow the procedure and move on to the next task, improving the overall flow of work.

Supports Business Growth and Stability

As your business grows, you’ll likely need to hire more people or expand to new locations. Having policies and procedures makes it easier to scale your operations. New staff can quickly learn their jobs according to the same standards you’ve established, which ensures your business runs consistently across different locations or departments.

Moreover, documented processes help track business performance and identify areas that could be improved, which is important as you grow and face new challenges.

Key Areas for Policies and Procedures

The specific policies and procedures you need will depend on your business type, but here are some key areas to consider:

Employee Behavior: Set expectations around workplace conduct, performance, and professionalism.
Health and Safety: Outline procedures for maintaining a safe work environment and handling emergencies. Ensure your policies and procedures follow Occupational Health and Safety Regulations as outlined by WorkSafe BC.
Customer Service: Define how to interact with customers, handle complaints, and process returns.
Financial Management: Set guidelines for managing money, invoicing, and bookkeeping.
Technology and Data Security: Establish protocols for protecting sensitive information and using business systems safely.
Leave and Attendance: Clarify your policies on sick days, vacation, and time off.

How to Get Started

Creating policies and procedures may seem like a big task, but it doesn’t need to be overwhelming. Here are a few steps to help you get started:

Identify Areas of Need: Think about which parts of your business could benefit most from written guidelines. Focus on the areas that have the most impact on day-to-day operations, legal compliance, or customer service.
Write Simple, Clear Documents: When drafting your policies and SOPs use clear and straightforward language. The goal is to make it easy for employees to understand and follow.
Ask for Feedback: Before finalizing your policies, get input from your employees or managers. They might have insights on how to make the procedures more practical or effective. Seek legal advice to ensure you are in compliance with all applicable legislation.
Review Regularly: Policies and procedures should evolve as your business grows. Set aside time each year to review and update them as needed.
Train Employees: Once your policies and procedures are in place, make sure to train your team. They should understand what’s expected of them and how to follow the procedures correctly. Store policies and procedures in an easy to access location and make sure everyone knows where to find them.

In conclusion, while creating policies and procedures might seem time-consuming, it’s a smart investment in the long-term success of your small business. Not only do they help streamline operations and reduce confusion, but they also protect your business from legal risks, ensure compliance with all applicable regulations such as WorkSafe BC Guidelines and BC Employment Standards, and provide a solid foundation for growth.

By dedicating time to creating clear, effective policies and procedures, you’ll make your business more efficient, easier to manage, and better prepared for the future.