One of the advantages of a small business is that it's usually not bogged down by bureaucracy which means it can be flexible and agile. As a small business owner, you might want to maintain a relaxed atmosphere but you still need defined policies and procedures in place to manage your operation and staff.
Rules often get in the way of making decisions but it's when things go wrong that policies and procedures in a business becomes extremely useful. Having documented policies and procedures that are kept up to date, along with a communication process for any changes, helps you and your staff maintain consistency within the business. When issues occur, your staff won't have to approach you for instructions every time. For example, when is it appropriate to offer a refund to customers? According to small business expert Dr Greg Chapman:
"Even the smallest businesses need policies and procedures for all essential parts of their operations, or else decision making is ad hoc. The policies and procedures must be properly documented and kept up to date, with a communication process for any changes. Often mistakes happen when staff aren’t aware of changes. "However, it’s not enough to have a beautiful set of operations manuals, the staff must be trained in their use. This starts with the induction of new staff members and continual education of existing staff. When your staff understand how you want tasks to be undertaken, and how decisions are to be made, and the limited number that need to be referred to you, they be coming to you for every problem."