From my Corporate days I was exposed to Standard Operating Procedures (SOP), some in the form of checklists, other rules, other guidelines. They've followed me in operational, finance and investment roles.
Why Founders Need to Grow Up About SOPs
Most founders cringe at the mention of SOPs. "We're not some bureaucratic corporation," they say. "We need to stay agile."
I get it. I've said the same thing many times but taking a step back we can see they are everywhere and we rarely take notice.
When stakes are high, you don't want creativity. You want consistency and discipline.
Every step documented. Every decision criteria written down. Every approval threshold defined.
Think about it - you wouldn't want a pilot "winging it" during or relying on memory during pre-flight checks - they follow a checklist, every time, without exception. Do you want to board a plane thinking a step was missed?
Why shouldn't we expect the same from our critical processes and extend the same peace of mind to our customers about our products?
But here's the truth: SOPs aren't about creating bureaucracy. They're about creating space for the work that actually matters.
The Risk Mitigation Reality
SOPs aren't about slowing down decision-making. They're about making consistent and hopefully better decisions under pressure.
Consistency builds confidence. It shows you think systematically about your business, not just reactively.
The same principle applies when scaling the team. A new finance hire doesn't need to interpret your mental process for booking revenue - they follow the documented procedure. Less training time, fewer mistakes, more consistent outcomes. Yes the process will evolve but it starts from a foundation which can be improved.
I've relied on SOPs as investment tools too - they outline the steps to make an investment, minimum acceptable criteria, committees, number of signatures required. Everyone from the General Partner (GP) to accounting knows what's needed and when.
As developers, we rely on SOPs daily (though we don't call them that). Code review, QA, deployment - the steps before we merge. The entire CI/CD pipeline is an SOP.
Founders also forget that one of the very first documents they sign when incorporating is essentially an SOP. The charter documents the steps and rules that must be followed in certain events. It's the ultimate corporate governance SOP.
The Close Revamp
When I joined Gitstart (the YC-backed startup), month-end close took three weeks and that's when it was done! I'd relied on them as part of close processes for listed companies and implemented them in startups before. Operating almost blind was very frustrating.
Within a 2 weeks of joining, I fired the accountant, hired a bookkeeper, and rebuilt 5 years of accounts across 3 countries. The purpose: build a foundation.
I reworked the entire closing process. Everything was manual initially - I did the work myself and learned what was most efficient and necessary for the business. I did this for 3-4 months, and only then did I formulate a standard process.
Numbers that were available on the 21st-22nd of the month are now available within the first 3 days. Accounts are usually closed around the 8th. Decisions can made proactively not reactively.
The new month-end close process:
- Day 1-3: Collection and data gathering
- Day 4-5: Account reconciliation (specific order documented)
- Day 6-7: Management review and adjustments
- Day 8: Final review and approval
- Day 9: Investor reporting and distribution
Result? Close time dropped from three weeks to nine days. More importantly, our numbers became defensible because we could explain exactly how we arrived at them.
Our investor noticed during our board meetings. They asked pointed questions about our "financial discipline." That phrase stuck with me - because that's exactly what SOPs are. We spend more time talking about stuff that matters.
Start With What Kills You
You don't need to document your entire company on day one. That's insane.
Start with three things:
- The process that, if screwed up, would cost you the most money
- The task your best person does that only they know how to do
- The thing you find yourself explaining over and over again
Each of these, left to fester or done inconsistently, creates risk. Done systematically, can become competitive advantages.
The Logic vs. Emotion Filter
The best part about documented procedures? They remove emotional decision-making from routine operations.
When cash gets tight, you don't make panicked cuts based on how you're feeling that day. You follow your documented cash management procedure. Review spending categories and prioritise.
I've downsized companies, and trust me - removing emotion is the sanest thing to do.
When an investor asks for additional metrics, you don't scramble to create impressive-looking numbers. You follow your established reporting methodology and explain your process transparently. Not to mention your numbers are always available (that's another hot topic many founders need more discipline with!)
SOPs create a firewall between urgent feelings and important decisions.
The Compound Effect
After months of systematic process documentation and execution, something unexpected happens: clarity, accountability go up and stress goes down!
Good data enables good strategy. Consistent processes generate good data.
From Manual to Automated
Here's where the story gets interesting for me personally.
First as parents we should apply the same principle when raising very young kids - certain routine things such as feeding, bath, and bed time are easily standardised. You create the have mental space for the complex parenting decisions that actually matter.
Secondly and the irony isn't lost on me. After months of manuallay executing these processes at GitStart and trying to balance more Strategic Ops works and my family life I realized that most founders are similar shape when it comes to back-office stuff.
That's when I started building what would eventually become FoundersBoxx. Not as a business idea, but as a survival and time freeing tool. I needed to automate the mechanical parts of the execution so I could focus on the strategic parts.
Every feature came from a real pain point: automated investor updates, real-time runway tracking, one-click board reporting. The tool that let me maintain precision without sacrificing time.
I built software to execute the SOPs I'd created to solve the chaos I'd inherited. Full circle.
What's one process in your startup that, if done inconsistently, could cause your startup to fail?
Document that process this week. Your future fundraising self will thank you. And if you're curious about the tool that emerged from this journey, stick around - more stories to come.
