Business Documentation for Small Businesses: Meaning, Importance and Types

I remember reading the story of a business owner in Abuja recently, who lost an international partnership because she couldn’t prove her expertise. When asked to present documents showing her expertise and track record, she couldn’t produce any, since she has 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 started frantically putting something together. However, it was too late, as the panel moved on to other people who had their documents ready and could prove what they were saying with the records they had kept.

As the saying goes, “Write the vision and make it plain”. This means that writing it is not enough, making it plain is very important. Now, before we go into the benefits of business documentation, let’s examine what business documentation is.

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 on your business to-do list. It is actually important to the success of any business. Some of its benefits are as follows:

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 importance of business documentation:

1. Tells the story of your business to relevant stakeholders

Your business documents help tell the story of your business, from how it started, where it presently is, and where you are heeded. For example, your business plan details information about your business vision and mission, and the goals to be achieved per time to actualize that vision. This helps relevant stakeholders, such as your business partner, investors, etc. understand what you are doing and why.

2. 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.

3. Access to opportunities

With good documentation you open your business up for opportunities. You can also access opportunities fast, as they request any document, you are able to send it in immediately.

Some of the documents you need to access business opportunities include your 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.

4. Draw insights from past events

Without documentation, you wouldn’t be able to draw insights from past events to solve present challenges. Also, business documentation helps you to keep stock of your goals, the progress you have made so far, etc.

Core Business Documents you Must have as a Small Business Owner

Here are 5 must-have documents to succeed as a business owner. Not only do they make your work process easy, they also make you prepared for any opportunity that may come your way.

1. Business plan

Your business plan is like an architectural plan which gives a clear overview of your business, containing information, such as business objectives, marketing plans, financial information, etc.

It also contains details about your organization’s structure, products, services, target market, growth plan, etc. Your business plan is an important document that outlines and communicates the important information about your business, to both internal and external stakeholders.

And it is important to give you direction on how things would be run in the business. Without a business plan, most business owners run on vibes.

2. Pitch deck

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 must ensure to highlight key information that would convince investors that your business is worth investing in.

Such information includes business numbers, revenue generation models, milestones in the past 6 months or more, etc.

3. Financial plan

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. This plan should include your current financial situation, short and long-term financial goals and how you hope to achieve them, financial budget, etc.

Need to analyze your business numbers to block leakages and get out of debt? Hit us up.

4. Marketing Plan

Your marketing plan is another important document that outlines your plans to market your business, generate leads, and convert them into customers.

Marketing is beyond posting on social media. So, your marketing plan should be comprehensive enough, taking into consideration the various channels of marketing there are. As a small business owner, there are various marketing strategies that you can implement to market your business.

Some of these strategies include Content marketing, social media marketing, use of flyers and handbills, etc. So, your marketing plan should include the marketing strategies you plan to adopt, the marketing budget, the assets you would need to execute your marketing plan, etc.

5. Business Model Canvas

Your business model canvas is another important document that you must have at hand. This is a one-page document that gives a succinct description of your business model, acting as the executive summary of your business plan.

We created a business model canvas specifically for small and micro businesses, to help you document your business processes with ease. You should get a copy.

A business model canvas contains information about key partners of a business, key activities, key resources, value proposition, channels, customer relations, cost structure, and revenue stream.

Wrapping Up

While the demands of running a small business may seem all-consuming, neglecting proper business documentation can be a costly mistake. However, by getting your business documents in place, you can clearly communicate your business goals, establish clear guidelines, and mitigate risks. Just like a solid foundation is required to make a house stand firm, solid business documentation lays a solid foundation to help your business stand the test of time.

At Triift Africa, we make running a business easy, so, we’ve created easy-to-edit templates that you can use to design all of the documents discussed above. With them, creating your business documents would be a piece of cake.

Need to prepare your business documents to attract investment and make solid business decisions? Request a document from us.