Gearing up for growth: 5 simple steps to set up your business processes
Most entrepreneurs dream of watching their business grow. But that dream can quickly turn into a nightmare if you haven’t formalized your business processes.
As a business expands, it becomes increasingly difficult to manage using informal and unwritten rules kept in your head. A lack of processes and automated systems can also make it harder to sell your business when the time comes.
“Many companies run into trouble because their management practices and systems don’t keep pace with the demands of a growing business,” says Scott Lewis, a Managing Director in BDC Capital’s Growth & Transition team. “Can your business run without you? If the answer is no, it’s time to establish repeatable processes that will allow you to scale up.”
Lewis offers the following tips for entrepreneurs that want to create processes to position their business for sustained growth.
1. Review your workflow
The first step is to have someone interview everyone in the company about how they do each step of their job, starting with you as the owner. Next, work out an optimal workflow for each area of your company, including your own responsibilities. For guidance, look at best practices in other businesses.
It’s worth considering hiring an outside consultant, who can bring a fresh, expert perspective to this work.
2. Document your processes
Now, document in detail the optimal processes you’ve identified—ideally, in an electronic form. A digital version of your processes will allow you to update them constantly.
You can use free sharing applications such as Google Docs and Evernote, or business process management software, which can offer additional features such as a dashboard, alerts and workflow scheduling.
3. Train employees
Next, train your team to ensure they know the processes and execute them consistently. You should regularly inspect work to make sure it’s done as documented. Put a senior manager in charge of ensuring compliance with processes and updating them.
4. Get leaner
Remember that the ultimate goal is to simplify your business processes so you can provide more value to customers. This goal is achieved by identifying and eliminating sources of waste in your operations.
Continually analyze your processes to look for steps you can do more efficiently or automate. Automation can improve efficiency, reduce errors, help your business run better and boost its value. Consider bringing in an operational efficiency expert to assess your company and help you make improvements.
5. Foster a self-reliant business
Review your business to identify areas where it is too reliant on you, an employee, a supplier or a customer. Such overdependence makes you vulnerable in case of a disruption.
Most entrepreneurs in growing firms eventually have to delegate more of their responsibilities to key managers. “Hire good people and trust them,” Lewis says. “Let your people work, while you spend more time thinking about your strategic focus and your next move.”