For many new business owners and operators, records management might not seem like the most pressing of their many concerns. There are a lot of moving parts to operating a young business.
There are start-up costs. There is the pressure of entering quickly and confidently into the market. There may seem to be a lot hanging on the strength, weight and outcome of any early relationships – whether with potential clients, suppliers or partners. And there are a whole host of other challenges dependent on the specific industry being entered into.
Small businesses and start-ups have a lot on their plate. Putting into place a system for the management and storage of a new business’ records might, therefore, seem not so pressing a concern as those listed above. That is understandable. It may, however, also be costly.
In this article, we will look into how important records management is to young businesses. We’ll take a broad look at the challenges a new business can expect and we’ll demonstrate how effective records management both undermines risk and facilitates success across the board.
‘Business is all about who you know’. We know its true. All business operators do. At the Filing Room, and with our records management experiences, we’re not going to pretend that optimizing your document storage is more important than building those early, trajectory-defining relationships.
But doing so will help you.
All business relationships are just like those that we nurture in our personal lives. They require maintenance and the validation of renewing trust. A proper, efficient records management system optimizes the well-running of these relationships.
Keep all your records regarding one specific client in one secure, well-organized place. When you need a document – relating to a sale, receipt of sent or delivered items, or a contract agreement -, you’ll know exactly where to find it. And you’ll be able to do so quickly.
Leave your business contacts constantly impressed by the speed and efficiency with which you call up all your pertinent documents. They’ll trust you more and you’ll prove yourself a valuable, reliable contact to them.
Economics and Simplicity
Being economical – savvy with the way a business spends its money – is important regardless of where the firm is at within its life cycle.
For new businesses, start-ups or those still in their early years, this is even more important. New businesses may be cash rich and flush with the funds of wealthy investors, but you can be sure that their investors will be keeping a close eye on the accounts. They’ll be keen to ensure that their investment is being managed efficiently and appropriately.
They may be cash strapped and reliant on their first orders or the completion of their first series of projects before they can pay their creditors.
Either way, a new business will always be expected to keep an eye on outflow.
Obviously, a complete and effective records management system will ensure that you minimise filing and storage mistakes. That means fewer lost contracts, missed deliveries and forgotten meetings. But the potential for mistakes made is too obvious an argument.
So, for argument’s sake let’s assume that, despite that a business has no records management system to speak of, it makes no mistakes, loses no important documents and misses no appointments. It will still be losing money when compared with an identical business that does have a records management system.
‘Time is money’. Another phrase so true in the business world that it has almost become a cliché. The more time you spend searching for the documents you need, the less time you’re spending finding clients, making sales and completing projects.
Risk mitigation is the obvious reason why we come up with inventive and effective ways to manage our records. The reason why we do so is implicit in both the reasons listed above: if our records get lost, reputations are tarnished, contracts are unmet and business is ruined.
We’ll not delve too deeply into why risk mitigation is so important to the new business owner. Largely because that owner or operator knows the risks.
One thing we will stress in this article is the importance of keeping your records far longer than most people would think necessary. In Kenya, the law dictates that corporate records are kept for a minimum of 7 years. (If you want to learn more about Kenyan corporate law and how it impacts your business, you can do so here.)
There are, however, a number of reasons why you might decide to keep them longer. Tangles with ex-employees, with former business partners or rivals, can occur at any time. So, better safe than sorry. Keep your records for as long as your records management system allows; you never know when you will rely on them in the protection of your business.