Whenever I say the word “Operation,” perhaps your mind goes back to the childhood game of Operation where you attempt to take plastic bones out of a pretend patient without hitting the metal sides of the body. However, that’s not what I’m talking about in this article. I’m not talking about medical procedures or childhood games. What I’m talking about is the flow of your business – how you deliver your goods or services to your customers. If you’re trying to increase the value of your company, then you must build business operational systems.
According to Investopedia, operations management is “the administration of business practices to create the highest level of efficiency possible with an organization. It is concerned with converting materials and labor into goods or services as effectively as possible to maximize the profit of an organization. Operation management teams attempt to balance cost with revenue to achieve the highest net operating profit possible.”
Basically, operations departments exist to create systems within every department which will maximize your business’s profitability.
For most small business owners, though, having an operations department is a pipe dream. But creating operational systems is a realistic goal.
According to Wikipedia, operational systems are those systems “used to process the day-to-day transactions of an organization.” They are systems designed to help the company operate efficiently while preserving the “integrity of the transactional data.” Thus, if you use operating systems within your business, you can maximize the value of your company. However, many small business owners fail to put operating systems in place which leads to stymied business growth.
So how do you improve your business operations or create effective operational systems? Well, you keep the following 10 things in mind.
Throughout the next few articles, I’m going to dive deep into how improving business operations can increase the value of your business. For more information on this topic, be sure to listen to the Podcast on Stitcher, Spotify, iTunes, or Libsyn.
And don’t miss the next article where I’ll be discussing operational steps you need to take in a service-based company!