Whenever I use the word ‘governance’ with owners of small to medium-sized businesses, they usually say ‘it is only applicable to large businesses’.
Small or large – every business faces similar challenges that fall under the mantle of governance. Therefore, it is applicable to every business owner. Actually, it’s more important to a small business. This is because they usually don’t have the resources to survive if something major happens.
What role does governance play in relation to small business?
- Health & Safety is the number one issue. You need evidence that H&S is being implemented and pro-actively managed.
- Managing growth around hiring the right people at the right time.
- Anticipating the need for extra plant and equipment. Assessing the return on investment (ROI) for such purchases.
- Financial forecasting to predict extra funding required to accelerate growth. And importantly, sourcing that funding.
- It prepares the company for what the future may bring. Calculating risks and planning responses.
- Anticipating and planning the sale of the business, maximising the return for the owner(s).
- Developing an understanding of the importance of cash flow, not just increased revenue.
How might Governance be implemented for smaller businesses?
Governance for a small business would normally take the form of an advisory board. This meets regularly and is recommended in place of a formal board of directors. Regular input from external specialists helps owners make the right decisions for their future.
Contact us for more information. A local advisor can make recommendations and give examples of how an advisory board might work for your organisation. The benefits speak for themselves.