Because ‘No Policy’ Is The Worst Policy

If you ask most small business owners about some of their biggest headaches, lessons learned the hard way, or days that get blown up by customers, you’ll find they all likely have one thing in common: these disasters could have been prevented by policies, forms and procedures.

Now, I know this is no one’s favorite topic. The mere mention of the word “policy” usually conjures pictures of bureaucrats, red tape and unfriendly procedures that don’t seem to acknowledge you’re a real human who is on the other end of this process.

But policies are your friend! Especially as a small business owner when they can be the difference between lost revenue from cancellations or flaky clients forgetting about their appointments. And perhaps the most overlooked reason that policies are good is that they make your clients feel good too. Let’s consider this scenario:

YOU HIRE SOMEONE TO PAINT YOUR HOUSE

  • No Policy: The painter stands in silence a few moments sizing up the room. No forms. No measurements. The painter looks at you and says, “$200 for the whole thing.” The painter says he’ll plan to come by next week to do the job, and he’s on his way.
  • Policy: The painter enters the room with a tape measure to record the size of the room. He has you fill out a form agreeing to a color, date and time for painting, and you both sign off on the agreed upon price of $200.

The price is the same in both of these, but the feel of the interaction for the client is different. Scenario one leaves us wondering what this painter is basing his pricing on! Is the painter sizing up the room or the gullibility of the owner? Scenario two leaves us assured that the pricing is based on measurements and scheduling, and we have both signed to this agreement. The client feels protected that the business is going to deliver on what it said it would, and the painter feels protected that the client will to pay the price.

Sometimes, as small business owners, we feel like policies are making us impersonal. Perhaps like the corporate settings many owners have told us they wanted to escape. In asking for signatures and contracts, we sometimes feel pushy or like we are sacrificing one of our best assets — our personality — from this exchange. But once again, think of it from the perspective of the clients. Policies typically say to them, “I have my act together and run like a business,” as opposed to, “I’m making this up as I go.”

It isn’t a commentary on your personality, other than to say that you want everyone to feel confident about this business interaction.

Ultimately, policies are your protection from those disaster scenarios of last-minute cancellations or forgetting — which ultimately cost you, the owner, time and money. And as I always remind my clients, the best part about being your own boss is you get to choose when you enforce these policies and when you don’t. If someone misses an appointment because of an emergency or illness, you can choose to waive the cancellation fee without having to run it through the higher-ups. But what you can’t do is not have a policy in place and then try to make and enforce one retroactively.

So make those policies. Inform your clients, get signatures, and then remember that behind every policy is a human, and the whole reason we have policies is to have clear and efficient interactions with other humans.