Build Business Operational Systems for Maximum Value Growth

Whenever I say the word “Operation,” perhaps your mind goes back to the childhood game of Operation. 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.

Podcast Time Index for “Operations Department vs. Operations Systems”

01:24 – Operations Department vs. Operations Systems
01:57 – Ant Farm Operations
04:05 – Definition of Operations
04:28 – The Big “O”: Operations Management
05:47 – What the Operations Dept. Oversees
09:25 – The Little “o”: Operations Systems
11:29 – 10 Tips About Operations
11:56 – 1: Operations Include both People & Processes
12:35 – 2: People is often the Largest Cost in an Organization
12:51 – 3: Most People want to do Good Work
13:26 – 4: There are very few quick fixes in the Operations of established Businesses
14:16 – 5: Operations is not Rocket Science
14:55 – 6: Small Wins build Motivation, Large Wins improve ROI
15:17 – 7: Needing Help isn’t always a lack of Ability
16:19 – 8: Hidden Issues are often out of sight of the Owner or Management
17:18 – 9: Mitigation vs. Perfection
18:53 – 10: The Problem with Operating Systems is usually a weak Management System
19:31 – Closing

The “O’s” of Business Operations

The Big “O” – The Operations Department

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.

The Little “O” – The Operating Systems

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.

10 Things to Remember as You’re Building Business Operational Systems

So how do you improve your business operations or create effective operational systems? Well, you keep the following 10 things in mind.

1. Operations include both people and processes.
2. People are often the largest cost of an organization.
3. People want to do good work.
4. There are very few quick fixes in the operations of an established business.
5. Business owners and leaders must systematize the processes that already exist in their heads.
6. Small wins build motivation while large wins improve ROI (returns on investment).
7. Don’t be afraid to ask for help.
8. Business owners usually see symptoms of company problems rather than the source of the problems.
9. Operational systems help mitigate company risks.
10. Most of the time, you don’t need to fix or improve technology.

Throughout the next few articles, I’m going to dive deep into how improving business operations can increase the value of your business. Starting with our discussion of operational steps you need to take in a service-based company.