What is do-it-yourself governance?
Do-it-yourself governance means regularly reviewing how your business is performing, using advisors or other business owners to help.
This approach to governance is less structured than having an advisory board or a medium or large board of directors, but it’s still just as important.
Before you start
Make sure your basics are covered. This includes:
- understanding all your duties as a director, like acting in good faith, meeting your commitments and trading sensibly
- laying the groundwork for good governance, like documenting your plans, measuring your business performance and managing risks.
Review the ‘big picture’ of your business
How often you need to review your business depends on how fast things are changing, and whether you’re reviewing the whole business or just part of it. It’s a good idea to regularly check the basics and complete deeper reviews when big decisions come up, like seeking investment.
Making time can be tough, but it's worth it. Block it out in your calendar, avoid busy periods and prepare in advance. Delegating tasks can free up your schedule, and giving yourself extra time adds flexibility.
Don’t do it alone. A second opinion from a trusted business owner or advisor helps you identify blind spots and gain confidence in your review. Having someone involved also helps you commit and focus away from daily distractions.
Start small if you're new to business reviews. Just reviewing one area can help you get a feel for the processes and time involved.
Setting an agenda
Before reviewing how your business is running, set an agenda. An agenda will:
- help you prepare by identifying what information to gather
- keep the meeting on track
- serve as a record of what’s been covered.
Once drafted, check if your agenda fits the time you’ve allowed. You might need to reduce the scope or schedule extra time to cover everything properly.
Share your agenda ahead of time with anyone else involved in the review.
This will:
- give them time to prepare and offer feedback on what you’ve included or missed
- ensure everyone is aligned on the meeting’s focus
- show respect for their time and help make the meeting more productive.
A clear agenda makes the review more efficient and focused – and gives you structure for taking notes and capturing key decisions.
Reviewing the right things
Your market performance and direction
Look at your sales results, which markets to aim for next, and how to improve your market performance.
Compare your sales results to any plans or objectives you set previously. Think about what caused any particularly good or bad results, and what you can do to repeat success or combat problems.
If you haven’t set any plans or objectives, this is a great time to do it. Then you’ll have something to work towards and review next time.
Your products and services
Look at how well your existing products meet your customers' needs, and how long they’ll continue to. For example, you could review customer satisfaction results or data about people’s purchasing intentions.
Ask yourself – do you have plans to improve or replace products and services that need updating?
Think about how you compare with competitors, both local and overseas, and if you’re well placed to keep your position in the market. Identify opportunities in your business where you could deliver your products or services in a more innovative way.
Your operations and efficiency
Think about whether any internal issues are holding your business back. These include the following:
- Your premises – are they a good fit for your business?
- Your methods –have you gained experience that could improve your output?
- The technologies you use – are they outdated?
- Your processes – could they be improved?
- Your IT – does your IT have poor support?
- Your quality – do you have checks in place?
Your finances
Review how your business is financed – the levels of retained profit, the sales income generated and whether your cash flow is healthy.
Think about:
- if you’re happy with your finances
- how they compare to your budgets
- if you need to change anything to keep your cash flow healthy.
If you’re seeking funding for a project, either from investors or through a loan, healthy finances help prove your business is under control and doing well.
Your people
Review your organisation structure, people planning issues, health and safety standards, and training and development opportunities.
Consider if:
- your structure and staffing have kept up with growth or other changes in your business
- you’re growing, retaining, and developing staff effectively
- any staff members need special attention
- you’re planning ahead for any hiring, so you aren’t doing it under pressure.
Knowing your risks
Good governance starts with understanding and managing risk. Risks can be operational or strategic – think past problems, legal risks, or potential fraud. For small businesses, risk management might be part of your regular review.
As you grow you might delegate the details and instead, review risks through reports which highlight key figures and any major issues.
Directors are personally responsible for health and safety, and ensuring the business stays solvent. Insurance helps, but it doesn’t remove your legal responsibilities.
User your review process to spot any unmanaged risks. Don't let the details overwhelm you – document and deal with what matters most.
Sometimes the smartest move is knowing when to step back. Get staff involved, swap insights with another business owner, or bring in advisors with risk expertise to get a broader view and avoid blind spots.
Recording key points
Record what you discuss during a review of your business. Include:
- the topics you cover
- the decisions you make
- any action points.
Recording key points gives you a great structure for your next review and sets out the important tasks to do before then. If you don’t record key points, you might miss some important actions in your business review.
How you record key points is up to you.
You could:
- ask someone to come along just to write stuff down
- record the meeting.
Ask the meeting attendees to check the notes for anything you have missed and to help keep them objective.
Following up your review
Do-it-yourself business reviews are valuable for the insight they can provide, but to get lasting improvements you need to make a plan and stick to it.
If you’ve recorded actions, set a schedule of doing them and follow up. Set a date for the next review and write down key topics to cover and set yourself a calendar reminder to finish any open actions in time for the next review.
A quick debrief can help you make sure your reviews are working for you, and not the other way around.
Think about what went well, and what you might improve next time. Ask the others who were at the meeting too. Don’t panic if your first review isn’t perfect.
More structured governance
Do-it-yourself business reviews are a good first step, but getting experts on board in a more formal way is a better long-term option.
Adding structure to your governance helps you separate governance work from managing your operations. You’ll enjoy consistent support from experienced advisors, and they’ll be committed to keeping your business running well and able to face challenges.
To get started with structured governance, you can:
- set up an advisory board if you need formal decision-making
- add to your board of directors if you just need good advice.
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