I remember reading the story of a business owner, who lost an international partnership because she couldn’t prove her expertise. She was asked to present documents showing her expertise and track record, but couldn’t produce any, since she had not been taking her business documentation seriously.
To not lose the deal, she started pleading, trying to convince the panelists that she was capable. However, word of mouth doesn’t cut it here. And just like the saying goes, “If you didn’t document it, you didn’t do it”.
To save face, she frantically started putting something together. However, it was too late, as the panelists moved on to other people who had their documents ready and could prove what they were saying with the records they had kept.
This shows the importance of documentation to any business. And in this article, we will examine the meaning of business documentation, its benefits, and the various types of documents to get as a small business owner. Let’s get to it.
What is business documentation?
Business documentation is the process of filing and recording the activities and processes of your business.
It involves putting everything relating to your business together in terms of processes, achievements, projects, finances, etc. so it can be clearly seen, read and understood by stakeholders. This could either be done digitally or manually, depending on the business type.
Now, it is key to note that business documentation is not just a task to tick off in your business to-do list. It is actually important to the growth of your business.
Benefits of business documentation
Imagine building a house without blueprints or navigating an unfamiliar city without a map. In both situations, not having clear guidance will lead to being confused and making costly mistakes.
The same also applies to running a business without having proper documentation in place. It leads to missed opportunities, inefficiencies, and delays in growth. Below are some of the benefits of business documentation:
Tells the story of your business to relevant stakeholders
Your business documents tell the story of your business; from how it started, where it presently is, and where you are headed. For example, your business plan details information about your business vision and mission, the goals to be achieved per time to actualize that vision, etc.
This then helps relevant stakeholders, such as your business partner, investors, etc. understand what you are doing and why.
Serves as a guideline for your internal team
Think of business documentation as a recipe book for your company. Just as a chef relies on detailed instructions to create a delicious dish, entrepreneurs need documented processes to ensure consistency and quality in their operations.
Recipes outline the required ingredients, step-by-step instructions, and cooking times. Likewise, business documentation provides employees with clear guidelines on how to perform tasks, handle customer interactions, and maintain the desired level of quality.
Access to opportunities
To get your business investment ready and easily access opportunities, you need to have some key business documents in place, such as business plan, pitch deck, registration certificate, financial projection, etc. Each of these documents is demanded by every investor to understand your business and why they should invest in it.
Draw insights from past events
Without documentation, you cannot draw insights from past events to solve present challenges. Business documentation also helps you keep stock of your goals and the progress you have made so far.
Core business documents you must have as a small business owner
Your business plan is like an architectural plan which gives a clear overview of your business. It contains information on business objectives, marketing plans, financial information, etc.
It also contains details about your organization structure, products, services, target market, growth plan, etc. And it outlines and communicates key information about your business, to both internal and external stakeholders.
Your business plan also gives you direction on how things should run in the business. Without a business plan, businesses run on vibes.
A pitch deck is another important document that gives an overview of your business in a way that allows investors to make an informed decision as to whether to invest in your business or not. Pitch decks are comprehensive documents that cover your business plan, product/service, vision, mission, revenue generation model, etc.
Now, pitch decks are mostly used in investment-seeking situations, when you are seeking funds from investors. Thus, you need to highlight key information that would convince investors that your business is worth investing in.
And such information include business numbers, revenue generation model, milestones in the past 6 months or more, etc.
One of the common mistakes that many business owners make is not having a financial plan. Business is all about numbers; and numbers point to your finances.
So, to keep your business going smoothly, you need to have a financial plan. And this plan should include your current financial situation, short and long term financial goals and how you hope to achieve them, financial budget, etc.
Your marketing plan outlines how you intend to market your business, generate leads and convert them into customers. It should also include your marketing budget, assets to use in executing the marketing plan, etc.
Now, marketing is beyond posting on social media. So, your marketing plan should be comprehensive enough, taking into consideration the various marketing strategies there are, such as content marketing, social media marketing, use of flyers, handbills and stickers, etc.
Business Model Canvas
Your business model canvas is another must-have business document. It is a one-page document that gives a succinct description of your business model, acting as the executive summary of your business plan.
A business model canvas contains information about key partners of a business, key activities, resources, value proposition, channels, customer relations, cost structure and revenue stream.
Solidifying your business with the necessary documentation
While the demands of running a small business may seem all-consuming, neglecting proper business documentation can be a costly mistake. By getting your business documents in place, you can clearly communicate your business goals, establish clear guidelines, and mitigate risks.
At Triift Africa, helping SMEs informs every decision we make as a brand. So, beyond helping you with business advisory and resources, we are aware of the importance of community for business owners where they can bond and learn with others. Want to connect with other business owners in your niche and beyond? Join us today
Need to prepare your business documents to attract investment and make solid business decisions? Request a document from us.