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Lean Startups Need to Start Documenting to Scale
For startups that have begun to establish themselves as a sustainable business, growing pains are only a matter of time.
Any experienced entrepreneur will tell you that successfully starting and maintaining a business is more involved than just finding something to sell and picking a logo. Inevitably, the onslaught of moving parts becomes difficult to track and manage. When so much is up in the air, it can be challenging to evaluate the efficacy of a company. Even worse, when it comes time to sell, this uncertainty can make it even more troublesome to prove your worth.
The best thing that entrepreneurs can do to successfully manage and evaluate their growing business is to actively standardize processes and formalize common procedures. Just like every good chef needs recipes, every good entrepreneur needs standard operation procedures (SOPs).
Yes, we know, this sounds boring. We also know that there is an endless list of good sounding reasons to avoid documenting. In fact, we wrote them down... to show you why they’re wrong.
4 (Bad) Reasons Startups Avoid Documenting
You've probably heard some of these popular excuses before.
Too Much is Changing Right Now
- "Because we’re a new company, we’re always in a state of flux."
- "I don’t want to spend valuable time documenting things that might change in the near future."
- "We’re still growing and I don’t want to standardize something this early because we need to be flexible."
Procedures Feel Constrictive
- "Standardization sounds like we’re attempting to be more official than we actually are."
- "If we create standard procedures, it could stifle our ability to innovate."
We Don't Have Time
- "We hardly have time to keep up with the current workload."
- "I don’t want to write down things that I barely have time to complete in the first place."
- "It’s just not a priority."
This Feels Too Corporate, We’re Not Like That
- "Our company is different than large corporations."
- "We’re a business that puts culture first, and writing down processes will make my employees feel like they’re being policed."
Well, you're wrong.
"The biggest value of documentation is standardizing things that already work, and sharing that information with others."
First, a Caveat
Documentation, while important, is not a blanket solution for improving a business, nor is it a lifeline for companies that are still getting started.
The biggest value of good documentation is standardizing things that already work, and sharing that information with other employees. Standardization is only effective if you have validated processes to standardize.
Don’t write down the recipe to a meal that you haven’t finished cooking. Until your startup has laid a solid foundation, documentation will be a waste of time. That said, good documentation practices can help, if your business is mature enough to warrant a recipe in the first place.
4 (Good) Reasons to Start Documenting Now
You want to scale fast and sustain growth for a future sale? Stop making excuses and start realizing the value that documentation can provide for your company.
Your Standards Aren’t as “Standard” as You Thought
Without documenting anything, knowledge about company processes is locked inside the minds of a select few people, all of whom assume that everyone is on the same page. But you can’t confirm this until all the knowledge is literally on the same “page” (forgive the wordplay).
You may think that everybody is doing the same thing because everyone ends up with the same grilled cheese on their plate. But later you find out that Bill in accounting is using Muenster instead of sharp cheddar. Really Bill? Muenster is the stinkiest of all the cheeses. C’mon.
Sharing is Caring
If you haven’t written down procedures that are crucial to business operations, then you are the gatekeeper between that knowledge and its true utility. Standard documentation is what turns knowledge into a group asset. Scaling a business successfully requires effective delegation, and delegating responsibilities can be difficult. As companies grow, this process can become even more challenging when information is held by numerous gatekeepers.
"Standard documentation is what turns knowledge into a group asset."
The rationale of a gatekeeper is understandable. If you’ve put your blood, sweat, and tears into a company, you don’t want to risk somebody else mucking it up. However, this is where standard process documentation is even more advantageous. Now that you’ve successfully created a dish that people want to eat, the best way to replicate it is by writing it down.
Think about it, you could probably reduce your multi-week osmosis-style training program down to just a few days. During these days of focus, new employees can spend their time getting up to speed, ensuring more senior people are not caught up in the one-on-one training of the newbies. After all, recipes exist because they’re the easiest way to duplicate a process. If Guy Fieri knows it, then you should too.
Consider the principles behind saving for retirement. The money in your account can be used now, giving you a fixed amount of utility for every dollar you spend. However, if you take the initiative to stash portions of your cash into a long-term investment fund, down the line, you’ll benefit from a much larger resource pool.
The process for investing our time isn’t that different. If your rationale states, “I’m way too busy to consider documenting!” Try considering the time spent documenting processes as an investment. When you invest some time documenting common procedures, you’ll get exponential returns down the line in the form of future growth.
“The hallmark of successful scaling is knowing when to hit the brakes so you can scale faster later.”
— Bob Sutton, Organizational Behavior Expert at Stanford
More Method Than Madness
Documenting standard processes is great for the future, but it can also immediately improve your business. Startups often feel like a non-stop circus, and in that chaos, innovation and creativity blossom. Standardization, however, is left wilting in the shade. People start doing things on their own, or against protocol, simply because they have to get it done.
When we’re busy and feeling productive, it can often appear like there’s a method to our madness. However, when we actually write down that “method,” what we actually find is madness. That’s ok! The purpose of documenting is to identify and remove barriers to success, always seeking to improve efficiencies—the ultimate productivity hack.
A Boring Way To Stay One Step Ahead
Pat yourself on the back. You’ve made it this far into an article about one of the least flashy concepts in the startup world—writing things down.
At its core, documentation is about improving communication. By the time you have created standard documentation for faster employee onboarding and recurring processes, you are 10 steps ahead of your competitors when it comes time to sell. Since everything is documented, a new owner or partner can quickly pick up business operations without going through the learning-by-osmosis process most of us dread.
By starting to document your processes you can free up time to work on your business, not in your business.
Others Who Agree
Don’t believe us? Here are some helpful resources on the importance of documentation.
- Shopify Blog - How to Prepare Your E-commerce Business for Sale
- Entrepreneur - Pro Tip for Startups: Document Your Processes
- Empire Flippers - How To Write Standard Operating Procedures Into Your Business
- First Round Review - The Do’s and Don’ts of Rapid Scaling for Startups
Written by Dozuki
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