“Rules are meant to be broken” has been an all-time catchphrase of those who love adventures and taking risks. And while these two qualities also define many business owners, the phrase itself does not always hold true when it comes to business rules. In business, breaking rules can lead to costly litigation, liability for workplace accidents, and damage to your business reputation, customer base, and revenue.
Business rules are carefully thought out and framed with the intention of streamlining work processes, maintaining order and efficiency, and improving employee productivity and customer satisfaction. They act as guiding principles and help employees inculcate the vision and philosophy of the business.
You can start writing business rules to make your startup efficient. The best place to begin is the areas that are affecting overall business efficiency.
How Business Rules Can Improve a Startup’s Efficiency
For a startup to grow, sustain, and thrive, all its employees and managerial team need to be on the same page. Whether in operations or behavioural conduct, every person associated with the business must uphold the brand value and culture of the business. This is where business rules can help set guidelines to maintain quality, discipline, and boost productivity.
Business Procedures to Clarify Operating Processes
As a business owner, you have worked at all levels, undergone the challenges, and developed a process based on learnings. Documenting the workflow and operating procedures based on the insights you’ve gained can help your business benefit from your experience.
For instance, a restaurant has an operating process where the cleaning staff takes care of hygiene and maintenance, the kitchen staff handles inventory and food, the administration staff handles the working of all equipment, cutlery, and facilities, and the bookkeeper handles daily tallying of accounts and cash. In case of any faulty equipment, the procedure states that the admin should be informed to get the equipment fixed.
An example of a straightforward procedure could be, “If the customer has been waiting longer than 20 minutes without having a drink in front of them, give them an extra drink on the house.”
This set of process guidelines ensures that the workflow is evenly distributed and that the operations run smoothly. Moreover, it also reduces dependence on a single person. If any staff member leaves, they will train their replacement, who will then follow the process.
While procedures and processes bring efficiency, they should not be rigid and should be open to improvement. Obsolete processes can be removed, and new ones can be accepted.
Business Policies to Resolve Conflict
Disputes and conflicts are a part and parcel of working with others, as two people could have different interpretations or approaches to handling a situation. When such conflicts arise, employees and managers can refer to business policies that state what will be upheld.
As a business owner, you initially write the first business policies, which are then expanded as needed. You can have policies for a variety of functions, such as disciplinary action policies, safety policies, technology policies, privacy policies, payment policies, confidentiality policies, and remote work policies.
Example: A leave policy could state, “A person has to apply a month before taking leave.” This policy will give the manager time to create a backup or communicate with the client about your leave. This will also help the business to avoid mass absenteeism and ensure work and leave are equally distributed.
The key distinction between procedures and policies lies in their stringency and universality within the company. They reduce the time and energy that goes into resolving conflicts. These policies also help maintain discipline and equitable treatment for everyone.
Business Rules and Regulations to Ensure Compliance
Business operates in society and deal with various external parties, from customers to vendors and suppliers, government authorities, competitors, and more. It must comply with multiple laws and regulations that protect both parties and the business. For instance, a business has to follow labour laws and ensure it complies with minimum wages and workplace health and safety laws. If it is a food business, it must follow hygiene and Food and Drug Administration (FDA) guidelines or risk losing its license.
Every business must follow tax laws, consumer protection laws, and competition laws. Some regulators ensure compliance.
While regulations and policies are both stringent and have to be followed, regulations are the same for every business, big or small. Non-compliance could have dire consequences, including penalties, fines, loss of business reputation, and even disruption of a company. For instance, the competition authority can reject an acquisition, or the FDA can ban a drug, which could have significant repercussions. Hence, businesses conduct internal audits to ensure compliance.
Common Mistakes That Make Business Rules Ineffective
Writing business rules alone does not bring efficiency. Their practical implementation does. Most businesses make mistakes in the implementation, which breeds inefficiency and renders the rules ineffective.
- Undocumented information: Communicating business rules orally can be misinterpreted and fail to provide a reference to go back to. Moreover, ambiguous statements destroy the very purpose of rules—clarity. Startups should properly document business rules in a language that is straightforward and clear.
- Lack of communication and awareness about the rules: Even if you have well-documented rules, they are ineffective if not communicated to the very people who need to follow them. Businesses should periodically communicate the rules to everyone by holding training or update sessions at regular intervals, as well as when there is a new update or change in the regulations.
- The rules and policies may not be easy to access, or people may not know where to find them.
- Not updating rules could lead to inefficiency.
- Having too many rules for everyone could lead to missing out on following some of them.
- A business should review its rules periodically, eliminate obsolete regulations, add new ones, and simplify them for better implementation.
Using Technology to Enforce Business Rules
Business owners can avoid common mistakes to ensure business rules are easily accessible, communicated well, updated and easy to understand. You can further improve its implementation using technology.
- Workflow management tools can help implement business processes by facilitating interdepartmental communication and approval.
- Accounting software can help stay compliant with tax and accounting laws by feeding the formula and data accurately into it.
Contact Glenn Graydon Wright LLP in Halton Region to Help You Prepare and Implement Business Rules
Consult a skilled business consultant to establish comprehensive rules for your entire business, including departmental, project, and employee-specific guidelines. At Glenn Graydon Wright LLP, our accountants and business consultants offer a range of services, including preparing business rules, setting up processes, and implementing software solutions. To learn more about how Glenn Graydon Wright LLP in Oakville can provide you with the best accounting and business consulting expertise, contact us at 905-845-6633 or connect with us online to schedule your initial consultation.