How To
15 min read

What You Need to Know About Writing Business Rules

Reem Abouemera
November 20, 2022

What you'll learn

What you'll need

Almost anything in the world needs structure to function properly. Think about it: Even your daily routine likely has some sort of order to it (wake up, eat breakfast, brush teeth, head to work). The same can be said for businesses. Business rules provide much-needed structure and organization to keep companies running like well-oiled machines.

Regardless of the size of your company, having a solid understanding of business rules and how to create them is essential for keeping things running smoothly. So what exactly are business rules, and how can you go about creating them? Keep reading to find out.

What are business rules?

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In short, business rules are guidelines that dictate how a company should operate. Think of business rules as the foundation a company is built on—without a strong foundation, the entire structure is at risk of collapsing.

These rules cover everything from specific processes and procedures to company culture and values. The goal is to ensure that the business runs as efficiently and effectively as possible, with minimal hiccups.

Here are a few examples of business rules you might see in action:

  • Acceptable payment methods are cash, check, and credit card. Wire transfer isn't an option.
  • All employees must clock in and out of their shifts using the timekeeping system.
  • No personal calls or texts are to be made on company phones.
  • All employees must wear identification badges at all times while in the office space.
  • No food is to be left out overnight in the break room refrigerator.
  • All non-employees who wish to visit staff members must schedule an appointment beforehand.

As you can see, business rules can range from very specific to more general. Speaking of specificity, business rules can also be established to define:

  • The business logic of a system
  • How data should be processed
  • How data is stored, accessed, and modified

For more context, let's say your company has a customer database that contains information about each customer's name and address. To keep this database organized, you might have business rules that specify how each person's information is stored.

For example, some rules could be:

  • All customers' names must be unique across databases
  • A customer's name can't be longer than 30 characters
  • A customer's address must include a valid zip code

Rules like these help keep the customer database tidy and organized, making it easier for employees to use.

Why do businesses need rules?

Imagine if you had to go about your life without any sort of structure or rules in place. You might brush your teeth once a week, show up to work whenever you feel like it, and eat whatever (and whenever) you like. While this might sound liberating initially, it would eventually lead to some big problems.

The same goes for businesses. Without business rules in place, things would quickly become chaotic. Without a sense of order or responsibility, it would be difficult to get anything done.

Rules aren't just a set of guidelines that businesses are required to follow. In addition to keeping things running smoothly, business rules can also:

  • Make sure everyone is on the same page, following the same procedures, and doing their job correctly and effectively
  • Prevent confusion and misunderstanding
  • Reduce the likelihood of conflict
  • Help businesses avoid making costly mistakes

For example, suppose you specialize in software development and have a new software developer on board. You're creating or updating software, and the new developer needs to know exactly what to do with certain aspects of the code.

There are two options here:

  • You can try to explain everything verbally—which is often confusing, time-consuming, and ineffective.
  • Or, you can write out a set of business rules that the developer can refer to as needed.

Which do you think is the better option? The latter, of course! By writing out business rules, you can save a lot of time and effort, not to mention reduce the likelihood of errors.

What are the five types of business rules?

While there are plenty of different types of business rules, these five are the most common:

1. Operational rules

These are the day-to-day rules that govern how your business operates. For example, an operational rule might state that all orders must be shipped within 24 hours or that all customer service inquiries must be responded to within 48 hours.

2. Policy rules

Policy rules are higher-level rules that define how your business should operate. They're usually more general than operational rules and are often written by upper management.

For example, a policy rule might state that all employees must take at least two weeks of vacation per year. A policy rule regarding customer service might state that all customers must be treated fairly and equally.

3. Compliance rules

Compliance rules are rules that the business must follow to stay compliant with regulations or laws. For example, a compliance rule might state that all employees must undergo a background check before being hired.

4. Strategic rules

Strategic rules are long-term guidelines that define how the business should achieve its goals. For example, a strategic rule might state that the company should focus on expanding into new markets.

5. Process rules

Process rules define the specific steps that need to be taken to complete a task. For example, let's say you have a process for onboarding new employees. This process might have multiple steps, such as sending an offer letter, scheduling a drug test, etc. Each of these steps would be considered a process rule.

Pro Tip: It's worth noting that business rules aren't static; they should be reviewed and updated regularly to ensure they're still relevant and accurate. This is especially important in legislative changes, such as new data protection laws or tax regulations. This will be incredibly important as your business grows and changes over time.

How do you create a business rule?

Now that you know why businesses need rules and what kinds of rules might exist in your own company, let’s find out how to actually go about creating a business rule. Here's how it works.

1. Define the purpose of the rule

First, you must consider what the rule is meant to achieve. What problem is it solving? What outcome are you hoping for?

For example, let's say you want to create a business rule that requires all employees to clock in and out of their shifts using the timekeeping system. The purpose of this rule would be to ensure that employees are only being paid for the hours they've worked and that they get used to using the timekeeping system.

2. Identify the stakeholders involved

Next, you must consider who will be affected by the rule. In our example, the stakeholders would be the employees, their managers, and anyone else who needs to see or use the timekeeping data.

In another scenario, such as a rule that requires all customer service interactions to be logged in the CRM system, the stakeholders might be customer service representatives, their managers, and other employees who need to access customer service data.

Be careful when identifying stakeholders—you don't want to leave anyone out!

3. Draft the rule itself

Now it's time to start drafting the rule. This is where you'll need to be as specific as possible so there's no room for interpretation or misunderstanding.

Here are a few tips to keep in mind:

  • Use clear and concise language
  • Be specific about what's required (or not allowed)
  • Include any relevant details like deadlines or exceptions
  • Include any penalties for breaking the rule

For instance, if you're drafting a rule pertaining to annual leaves, you might write something like this:

"All employees are entitled to 20 days of annual leave per year. Annual leave must be taken in blocks of at least five days, and employees must submit a request form at least two weeks in advance. Unused annual leave cannot be carried over to the next year."

This way, there's no confusion about what's allowed and what isn't.

4. Get feedback from stakeholders

Before finalizing a rule, getting feedback from the stakeholders involved is important. They might have helpful insights or suggestions that you didn't consider before.

In some cases, they might even point out that a rule isn't necessary or that it would be better to handle the situation differently. For example, they might suggest that rather than logging all customer service interactions in the CRM system, certain types of interactions could be logged in a different system instead.

Stakeholder feedback is an important part of the business rule-making process, so be sure not to skip this step!

5. Finalize the rule

Once you've completed the above steps, you're ready to finalize your business rule. This simply means writing out the rule in its final form and ensuring it's clear and concise.

You can create a flowchart or diagram to accompany the rule if you need to. This can help visualize how the rule will work in practice.

6. Send out the rule to all relevant parties

Finally, once you've finalized the rule, it's time to send it out to everyone to which the rule pertains. This could take several forms, such as an email, memo, or company-wide announcement. Alternatively, if your company has an intranet or employee portal, you could post the rule there.

Be sure to include any relevant details, such as when the rule will take effect and who employees should contact if they have questions.

7. Test and revise the rule as needed

Once you've implemented a rule, it's important to monitor it and see how it's working in practice. If you find that the rule isn't working as intended or that it's causing problems, don't be afraid to revise it.

For instance, let's say you aimed to have all customer service interactions logged in the CRM system within 24 hours. But after implementing the rule, you find it unrealistic for customer service representatives to log all interactions within that time frame. In that case, you might revise the rule to give them 48 hours instead.

If you don’t revise rules that aren’t working, employees won’t follow them and they won’t be effective. And remember: These rules need to be followed in order to keep your business running smoothly!

How to write business rules

How do you actually go about writing business rules? Here's a quick overview:

  • Stick to plain English: While business rules can be written in any language, it's best to stick to plain English. This will make them easier to understand and follow.
  • Use the present tense: Past or future tenses can be confusing, so it's best to write in the present tense.
  • Use the active voice: Passive voice can make your writing more difficult to read, so try to use an active voice instead ('s Tone Changer tool can help you maintain an active voice in your writing.)
  • Don't use too many words: Keep your sentences and rules as concise as possible. If your rule is longer than three sentences, consider breaking it up into multiple sentences.
  • Don't use complicated vocabulary: The goals of a business rule are clarity and simplicity. Business rules should be readable even by people who aren't familiar with the subject, so try to make them as clear and simple as possible.
  • Don't forget the details: When writing business rules, it's important to include all of the relevant details, such as exceptions, conditions, and clarifications.

That's it!

What not to do when writing business rules?

When writing business rules, there are a few common pitfalls to avoid. Try to remember the following when you’re drafting your rules:

Don't try to cover everything

One pitfall to avoid is trying to cover everything in your business rules. This is often referred to as the "kitchen sink" approach and is ineffective. It's impossible to anticipate every single scenario that might come up, so you'll likely end up with many rules that are never used.

Don't make them too specific

Another pitfall to avoid is making your business rules too specific. This can lead to inflexibility and rigidity, making it difficult to adapt to changing circumstances.

For instance, let's say you have a rule that says employees can take a maximum of two sick days per year. This might seem like a good idea, but what if an employee comes down with a serious illness and needs more time off? In this case, it would be better to have a general rule that allows for some flexibility, such as "employees can take up to four weeks of sick leave per year, following approval from their manager."

Don't make them too vague

On the other hand, making your business rules too vague can also be problematic. After all, it can be difficult to enforce rules that are open to interpretation.

For example, let's say you have a rule that says employees should dress "professionally." But what does this actually mean? In some workplaces, professional attire might mean wearing a suit and tie, while in others, it might simply mean avoiding ripped jeans and T-shirts. To avoid any confusion, it's best to be as specific as possible when writing your business rules.

Take care of conflicting rules

When you have multiple business rules, it's important to ensure they don't conflict. This can be a difficult task, especially if you have a lot of rules, so it's important to review your rules regularly to ensure they're still in line with each other.

For instance, you can't have a rule that says employees can take unlimited sick days and another rule that says they can only take two weeks of vacation per year. These rules conflict, so one of them needs to be changed.

Don't forget to test your rules

Another common pitfall is forgetting to test your business rules. Business rules are only effective if they're actually followed, so you need to make sure they're clear and easy to understand. One way to do this is to test them yourself or have someone else test them for you. This will help you catch any errors or ambiguities so you can fix them before they cause any problems.

Let's assume that you manage a team of customer service representatives. You've just written a new rule that says all customer service reps must take at least two breaks per shift. 

But when you test the rule yourself, you realize it's actually quite difficult to take two breaks when you're constantly dealing with customers. In this case, you would need to either revise the rule or provide additional training for your team on how to properly take breaks.

Where should business rules be stored?

There are a few different options for storing business rules, such as:

In a central repository

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One option is storing all your business rules in a central repository, such as a knowledge base or Wiki. This has the benefit of being easy to access and search, and it's also easy to update and change as needed.

In an employee handbook

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If you have a lot of operational rules, another option is to store them in an employee handbook. This can be a physical book kept in the office or an electronic document accessible to all employees. The benefit of this approach is that it makes it easy for employees to find and reference the rules as needed.

In a dedicated business rules management system

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Another option is to use a dedicated business rules management system (BRMS). This software application is specifically designed for storing and managing business rules. BRMS systems often have features such as version control, which can be helpful if you need to track changes to your rules over time. 

This is more suitable for business rules pertaining to compliance and process management.

In an enterprise rule management system

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If you have many different business rules, another option is to use an enterprise rule management system (ERMS). This is a software application that's designed to store and manage all types of business rules, from operational to compliance rules. 

ERMS systems often have workflow management and notifications, which can help manage complex business rules.

In conclusion

Business rules are the cornerstone of any effective organization, yet they're often overlooked or poorly understood. That's mostly because they can be difficult to write, especially if you're unsure where to start. Hopefully, that's not the case anymore—you now know the basics of writing clear, concise, and easy-to-follow business rules.

If you run into writer’s block, don't forget that you have a virtual set of hands to help you: with, you can quickly and easily generate high-quality content without worrying about common pitfalls. So why not give it a try? It might just be the answer to all your business rule-writing problems.

Bonus: Additional business-related content:

A Guide to Writing a Business Case (with Tips & Examples)

Business Report Writing - Step-By-Step (With Examples)

A Guide to Writing an Executive Summary + Examples

The Best Way to Write a Business Plan (With Examples)
How to Make Collaboration in Cross-Functional Teams Easier

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