It is amazing that over half of small businesses never make it to their fifth birthday. In human terms that would be considered an epidemic and all kinds of resources would be used to find the cure. But in all my adult years, which are quite a few, this is still the prevailing figure for small businesses.

I was just reading an article about why businesses fail and, although they had ten reasons listed, I think that many of them would come under one umbrella – policies and procedures.

I can say that I’m even guilty of this, although I do have some set procedures about bookkeeping. Other than that I don’t even have a set work schedule, since I want “freedom” to work when I want and how I want.

Makes sure basic policies and procedures are in place before opening your business.

In all honesty that’s not working very well. The dough just isn’t rolling in. What’s really funny is that I’m a policy and procedure whiz. I’ve written manuals from scratch for departments I’ve been in. Revised out of date manuals. Suggested changes that were money and time saving, etc. However, I’m not doing these same things for myself.

When you look at your business, do you have a set plan for handling sales, bookkeeping, the money end of things? If you don’t, start this instant, otherwise you’ll surely have problems down the road, especially if you have more than yourself handling things.

Next, get your own policies in order. What are your responsibilities? How are you going to fulfill them? Set out how much time you’ll work at your business and even the hours that you’ll work. This is especially important if you find yourself cleaning the refrigerator, bathing the dog, or weeding the garden instead of sitting down and writing the ad copy that needed to be finished yesterday.

When you first start out, your policies and procedures can be a little less stringent, but as your business grows and you have people working for you, you’ll need to tighten them. Sometimes you’ll even need to get down to exactly how to do each step of a procedure. For instance, I wrote a procedures manual for the commercial loan department of a bank. They had just converted to computer and the tellers needed to know exactly what form needed to be filled out, and how, for every single different transaction. Otherwise key information could get missed and when you’re dealing with someone else’s money, you don’t want any mistakes. People get very ugly when their money gets messed up!

At big stores like Penney’s or Target they have training manuals all set up, so that the new employee has something to refer to when they start in on their new job. Also, they have job descriptions, so that an employee knows what they’re supposed to be doing, and if they aren’t doing it what the consequences will be.

As a new business owner, you may find it beneficial to write up your own job description, and the consequences of not doing it. You could penalize yourself in some way. Of course the ultimate penalty is that your business goes under.

So, put together your policies for each position, finances, purchases, ways to monitor your businesses progress, decision procedures, etc. That way you’ll have a better chance of being the 50% that makes it.