Clean Up Your Business and Improve Potential Profit in 2020
As a business owner of a software company in South Africa for over 20 years, I know what it’s like to hit a brick wall. That ‘S-curve’ graph that tracks your business growth, starting at the initial growth spurt, then levelling out, and then the big slump where you’re not sure if you’re going to make it through, and then the surge of new business growth and profit as you reach your next zenith of client-acquisition, mostly on the back of you getting to know who you really are as a business, what your brand is, and who your ideal client is. Yes, I know that S-curve well.
But once that surge has settled, and becomes the new norm, your growth seems to hit sludge. Your turnover is steady and good, your clients are happy, you’re replacing those clients who fall away with new ones, and you are covering costs. But the line on the graph doesn’t go up as steeply as you’d like it to anymore.
It’s in times like these that your business – and probably your way of thinking about your business – could do with a vigorous spring clean. I don’t mean the ‘I changed the linen’ kind of spring clean. We’re talking pick up the rug, moving the couches and stripping the curtains type of spring clean. So put on your yellow gloves, because it’s about to get dirty.
4 Ways to Clean Up Your Business and Improve Potential Profit
1. Think, think, think
I have two young children who love watching Winnie the Pooh. One of this yellow, fluffy sage’s sayings, when faced with a challenge, is, ‘Think, think, think’. Like the yellow bear with the red top, it’s time we slowed down to speed up. If you’re fortunate enough to have a holiday in December or January, take the time to step back from your business and think. Dream. As business owners, we easily fall into the trap of believing that being busy means we are successful. On the contrary, we need to schedule dream-time where we can think our way into the next stage of growth.
2. Systems check
In this context, ‘systems’ does not mean technology or bleeping lights or white lab coats. Quite simply, a system is where any two parts work together towards a common function or goal.
Your business has a lot of different systems that act independently or in conjunction with each other to produce or support your profit-making efforts.
Doing a systems check involves you, sitting with your managers and function owners, and mapping out what systems you have in your business. Remember, this is not just about computers and machinery. This is every system that has a set of elements that work together to produce a function or goal.
It could be the printing machine in the factory being manned by an operator. The machine, the human operator, his lunch break, the process and the material being used by the machine makeup one system. It could be the secretary answering the phone and replying to customer emails. The phone, the tired/happy secretary, the computer and the slow/fast internet connection all make up that one system. And on you go, through your entire business until you have identified all the systems that make up your business.
The reason we do this is that the thought of improving a business as a whole is much too vague and too daunting, and so we usually just stop before we’ve even started. It is better to break up the business into systems that are in more bite-sized pieces, and then understand how we can improve each system, rather than look at the business as a whole. If we improve each system, even by just a little bit, our entire business will shift into another level of operations.
3. Workflow
The next step is to map out your workflows. Basically, a workflow is a pathway your product or service takes from start to finish to be produced: from answering the first email inquiry, through to creating a quote to pushing it through production, including stock management and QC, to loading it in a van and delivering it to the client, finally culminating in an invoice and accounts.
- Identify the workflow. What is the task or function? Eg, building a website.
- Identify the processes involved in the workflow. Eg graphic design, copy writing, SEO, website architecture and so on.
- Identify the process owners. Who is the person responsible for each part of the workflow? Who is the expert in that role? If no-one is identified, have a discussion on who is best to handle that function.
- Identify what steps are needed in each process. Sit with the process owner and unpack what takes place in that workflow. Eg Take the brief, brainstorm with the team, put together a first draft, send for QC, apply changes, send to client for comment, apply changes, etc.
- Identify how to do each step in the most efficient way. This is sometimes called a procedure document. The process owner will help with this. Eg ‘How to take a client brief for a new website’ will include instructions on what questions to ask and how to record the brief on a template that is also attached.
- Identify which of those steps can be automated. Repetitive admin tasks can often be automated by using business operating software. This frees up time and expensive resources can be redirected into more profit-supporting roles.
This process will streamline your workflow and make your business outcomes predictable, stable and measurable. In other words, you can confidently provide your customers with a consistent result, which ensures your customers keep coming back for more, and you remain profitable.
4. The lid
Once you have broken your business up into systems and mapped out your workflows, identify what limitations might be restricting the smooth and easy flow of work through that system.
A lid on your system could be an old machine that is slowing things down, staff that have a bad attitude, the lack of policies and procedures, or insufficient shifts to handle the demand on production.
This step could take a while.
- You could think about taking your management team away on a retreat-style workshop on a wine farm or game farm somewhere, to brainstorm these points in a focused and deliberate fashion.
- Alternatively, your ERP or business operating software will show you immediately, on a daily basis, in real time, where your constraints are across your entire business. ‘It can’t measure attitude,’ you might say. Well, it may not measure smiles per minute, but it does show you individual staff productivity, which should give you some indication of their attitude. At the very least it will raise a flag for you to address that you might not have otherwise noticed.
Once you’ve identified what the lid is in each system, you can brainstorm ideas to remove the lid and improve the system.
A good business coach can help you unpack these steps further, along with your ERP or business operating software. We never said it was going to be easy! But following these steps will improve efficiency across all channels, reduce wastage, and ultimately improve your bottom line. Here’s to spring-cleaned businesses and better growth in 2017.
