In part 1 you determined the strategic vision of your business, then in part 2 you went about marketing that vision.
Now, you need to put systems in place so that you the owner are not a part of the business, so that it runs (profitably!) without you. To do this requires a thorough analysis of your business; who does what, when, why & where?
Where are the gaps and what’s falling through them? What can be done better?
While you are looking at the processes, it wouldn’t hurt to also consider the plant layout; can it also be improved? Is there an opportunity for cell manufacturing for example?
I would also suggest implementing mistake-proofing ( or Poka-Yoke)to the processes so as to eliminate defects which in turn will boost your profits.
How about procurement? Are there opportunities there for improvement e.g. terms of trade, consignment stock etc? Are you aware that by improving your inventory turnover you are also releasing hard cash that can be better used elsewhere?
Exercise 4 – Stock Control
- Do you know what your stock turnover is?
- Do you do regular stocktakes?
- Are you managing the procurement of stock efficiently?
- What are your average days in Accounts Receivable & Payable?
Managing these areas of your business will dramatically improve cash-flow!
Create SOPs (Standard Operating Procedures) for each process, write scripts, take photos, and produce videos where applicable. From answering the phone to invoicing, manufacturing to dispute resolution – have the process documented.
Create an Organisation Chart: Make sure that it focuses on the roles required to achieve your Strategic Vision rather than the actual people who currently perform those roles. Include roles that will be required in the future even if you do not yet have people to fill them.
All this documentation may seem like an awful lot of work but the rewards are enormous! The time and effort put in at this stage will determine just how much of a saleable asset you have.
Exercise 5 – Systems
- Is there a system in place?
- By system we mean is there documentation in place for each process in the company?
- Does everyone understand the workflow?
- Is there a central database which can deliver an up to date snapshot of where the business is at?
- Can you quickly & accurately find out the current status on a job, a debtor, the sales pipeline or aged debtors?
- Is staff turnover high by your industry standard?
- What is staff morale like?
- Do your people feel empowered to innovate?
- What about career development?
- Are employees encouraged to develop their skills
Which brings us to your people and their role in growing the business which I covered previously here, I hope that this 3 part “how-to” helps you to regain control of your business whilst at the same time setting in motion its growth plan for the future.
Till next time, John
- Help your business grow by getting out of the way! Part 1 (johnnymaher.com)
- James S. Cassel: Thinking of selling your business? Better get started (miamiherald.com)
- Nation’s Noodle lives up to its name as production moves to UK (guardian.co.uk)
- 3 Tips on setting up Key Performance Indicators for your Business (KPIs’) (akcablog.wordpress.com)
- Want to Grow Your Business? Figure Out What You Suck At (inc.com)