Continuing from my last blog on the importance of processes in micro-enterprises, especially those started by first-time entrepreneurs, I had promised that this week I would discuss the requirement of processes in a growing business.

Why is it different?

What works for ten customers may not work for a hundred.

Suppose a food entrepreneur who set up the business as just a part-time hobby starts receiving regular orders from nearby villages and shops. Production increases. She employs two people. Raw materials are purchased in larger quantities. Some customers pay immediately, while others pay after a week.

Suddenly, remembering everything becomes difficult.

How much stock is available? Which customer has paid? How much money is due? Who supplied the last batch of raw materials? What was its price? How many units were produced yesterday?

These questions indicate that the business has reached a stage where informal management may no longer be enough.

Processes now begin to protect the entrepreneur rather than burden her. And it does not have to be a big overhaul of how she is operating her business.

A simple stock register can prevent shortages. A record of customer payments can reduce confusion over outstanding dues. A standard method of calculating costs can improve pricing decisions. A basic production checklist can help maintain consistency.

The business is becoming less dependent on memory and more dependent on systems.

Growth brings more customers. More customers bring greater expectations.

A person buying a homemade product occasionally may accept small variations. But once the product becomes a recognised business offering, customers begin expecting consistency.

The same pickle should broadly taste the same each time. A handicraft product should maintain an expected standard. A dairy business must maintain hygiene. A service provider should deliver within the promised period.

Processes help create this consistency.

This does not necessarily require lengthy manuals. For a microenterprise, a process may simply mean deciding that raw materials will always be checked before production, finished products will be counted before dispatch, and every sale will be recorded.

Simple routines can prevent avoidable mistakes.

In the beginning, processes should provide direction without becoming restrictions. With maturity and further growth, they should provide consistency without eliminating flexibility.

There is another critical aspect of having people and processes in sync. I shall delve into the topic in the next part.