New companies often grow in a rapid, haphazard manner. One day, the one, two, three or so founders do all the work. The next, a dozen employees divvy up the daily duties. Work evolves and inefficiencies arise that stymie growth. A better option is creating best practices right from inception.  

Entrepreneurs live in the immediate moment doing what needs to be done to get the company up and running.  So, these corporations often operate in a slipshod fashion, and workflow evolves organically.

Discrepancies Arise

As the enterprise brings in new people, they implement processes that they are familiar with. Consequently, jobs get done in various ways, maybe good processes are put into place, but often weak ones emerge.

Confusion starts with how to complete simple chores. For example, decision making becomes cloudy -- even when there are only co-founders. What is each person’s role and responsibilities, how are decisions made, and who has the final say are often unclear.

As the company scales up, the lack of well-defined procedures becomes more problematic. What tasks do the new employees take on from the founding team? How much input is needed before a decision is made? Who has the final sign off?

Business Processes Break Down

Without suitable processes, the operation becomes messy, and the issue becomes more pronounced as the startup is successful and grows. The corporate culture takes shape even though often it has not been articulated.

Internal controls are lacking, and operational inefficiencies arise.  Employees ask how to process interactions and receive conflicting messages from human resources, operations, and their bosses. 

Inconsistent processes lead to problems. The ambiguity increases the risk of internal fraud and attacks from outsiders.  As the disparities multiply, progress slows, frustration rises, tempers flare, and costs increase.

During the scale-up stage, new employees who may or may not be a good fit are often quickly brought in. Turnover becomes a problem the company cannot afford because hiring workers chews up a lot of time, effort, and money.

Small Companies Need Best Practices Too

So, effective business procedures are not just for Big Business. Small corporations also require them to operate efficiently. Startup executives have many balls in the air. They often are so consumed with the immediate moment that they do not see from within. Then, inefficient business processes emerge and slow growth. Entrepreneurs need to proactively manage workflow from the start in order to create a successful enterprise.

PeiChun Chiang has more than 15 years of experience in the start-up ecosystem. She empowered companies, like ATI (acquired by AMD), Lucid Motors, and Parade Technologies, to deploy strong financial systems and create robust financial business processes. As the founder of Start-Up Way, she ensures that new companies maximize their available financial resources.