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How to Set up Policies and Procedures

CEO’s and owners of start-ups and small business are so unique! As entrepreneurs, they start with a great idea to do business and evolve to wearing every possible hat that a business may need. They manage operations, human resources, payroll, marketing, accounting, financial reporting… they basically do it all. However, as their business grows, it becomes hard to do all the above jobs. There comes a time when they need to pass on the information that in their head to the rest of the team…and THAT is a challenge!

First step is for the CEO or the owner to accept the fact that it’s time to pass on the baton to select team members. These team members will become his A-team who not only will learn from the CEO but be able to support him/her with their knowledge and experience for the betterment of the business.

Second step is for the CEO to select a team member or sometimes a consultant to help with documenting the business operation and prepare policies and procedures. It can appear to be a daunting task but with proper planning, it can be achieved.

In many instances the CEO’s are the main bread winners for the business and getting on their calendar to document the information can be very tough. Easiest way to start documentation is to capture two-hour slots with the CEO over a few weeks and talk about the business. Below are some questions to help you start this conversation.

  1. What is the core business operation? Does it provide a service or goods?

  2. What avenues do we use to reach a customer? Is it online, in person, or combination of both?

  3. What steps does our customer take to complete a purchase?

  4. What software do we use to capture the customer purchase and how is the customer billed? Do we give credit terms?

  5. What are the methods used to receive payments? Who records the payments? Where is it recorded?

  6. Who are our vendors? How do we receive invoices? Who and where do we record them? How do we pay them?

  7. How do we keep our books cash or accrual basis?

Below are some policies and procedures (not all inclusive) that can help set the business on the right track help the A-Team and CEO run the business efficiently and effectively.

  1. Statement of Operations

  2. Purchasing and Accounts Payable

  3. Expense Reimbursement

  4. Inventory Management

  5. Revenue and Accounts Receivable

  6. Asset Capitalization

  7. Conflict of Interest

  8. Document Retention

  9. Employee Handbook

  10. Petty Cash

It is important to remember that documenting policies and procedure are not a one-time done deal. They need to be reviewed annually and updated as needed.

Hope this short article helps you with this mission! Should you need additional assistance I am here to help!

 

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