As your big business-idea becomes a reality, it’s time to start thinking about the structure of your business. What types of software systems do you need in place to work efficiently? How will you process phone calls, work orders, purchase orders, sales, deliveries, etc.? Eventually, every business will develop and utilize operational systems. However, your goal should be to establish certain operational systems BEFORE you open your business. Why? Because business efficiency matters. The more organized you are when you open, the fewer problems you’re likely to have after you open. Creating workflow systems in your business can streamline your processes and procedures.
Having streamlined processes and procedures makes your employees and your business more efficient and more self-sufficient. Therefore, you are freer to concentrate on your business as a whole rather than on finite day-to-day operations. Now, I’ve owned and operated several businesses, and I’ve worked with hundreds of business owners over the past 20 years. I’ve seen entrepreneurs institute a wide range of systems in their businesses, and I’ve tried quite a few myself. So when it comes down to systems, I feel like I know a thing or two, and I believe there are 3 basic systems every business owner needs.
An accounting system can track your operating income and expenses on a daily, weekly, monthly, quarterly, and yearly basis. Without one, you cannot catch problems, estimate your tax payments, tabulate your assets and liabilities, or evaluate the financial health of your company.
KPIs “indicate” the future success of your business. However, the difficult part of KPIs is that every business has different indicators of success. For doctors, it may be how many patients are pre-scheduled over the next 6 months. For financial planners, it may be the size of their customers’ portfolios. Yet, others may measure success by how many purchase orders they’ve received or by how many units they’ve pre-sold.
For detailed information about Financial Reports and Key Performance Indicators, see Clear Financial Reports Entice Business Buyers – Post #12.
At its simplest, workflows are the specific steps you’re going to take to get your products or services to the market. They are systematic approaches to inquiries, correspondence, quotes, purchase orders, production, packaging, shipping, and delivery of your goods or services. Realistically, you’ll take dozens of steps in each situation, and you’ll encounter dozens of situations. Thus, you’ll take hundreds of steps in your business every day. Welcome to workflows.
“At its simplest, workflows are the specific steps you’re going to take to get your products or services to the market. They are systematic approaches to inquiries, correspondence, quotes, purchase orders, production, packaging, shipping, and delivery of your goods or services.” – Justin Goodbread, CFP®, CEPA®, CVGA®Click to tweet
All businesses have workflows or processes they employ when customers contact, walk into, order from, or buy from the company. Yet, not every business makes good use of workflows. Unless you create a system for every team member to follow, how will employees know the “right” way to interact with customers? How will they know how to price or package goods to be sold? Who is in charge of which task? In essence, what are your store protocols, and who knows them? Do you have them written down so that team members can refer back to them and you can hold your team accountable for following them?
Let’s say you’re in a widget-producing business. It doesn’t matter what the widget is. We’ll use the example of coffee cups for the sake of this example. So, your company, “Cups-to-Go,” makes coffee cups, and you’ve just received an inquiry from your website. A retail store wants to buy 20,000 coffee cups from you, and the company needs them delivered within the next 3 weeks. What do you do? Well, the processes you follow to move that inquiry to product delivery represent your workflow system. So, let’s take a look at workflows you may possibly follow within your system.
Record customer information. – Okay, who answers customer phone calls or receives online orders? What are their responsibilities once they receive an inquiry or an order? Well, according to Cups-to-Go policy, team members will enter clients’ contact information into a Customer Relationship Management System (CRM System).
Confirm the order’s legitimacy. – Once team members enter the customers’ information into a database, what happens next? In your coffee cup company, let’s say that the same team members must confirm an order’s legitimacy. They must verify the customer’s existence through Internet searches. Then, they must make a follow-up phone call to test the customer’s sincerity to purchase 20,000 cups. Is this a bonafide order or an online hoax?
Create a purchase order. – Upon verifying the order’s legitimacy, your team members will then create a purchase order for the 20,000 coffee cups. They’ll record all necessary information they receive through phone calls, online carts, and checkouts, or hand-written requests. What type of cups does the customer want? What size do they need? Are the cups colorful or monochromatic? Are they functional or decorative? When does the customer need them?
Send an invoice. – After team members create purchase orders, they send them to accounts receivable. Cups-to-Go team members in accounts receivable then create an invoice and determine collection requirements. Will you require 10% down to begin production on their cups? Do you ask for cash upon delivery of the products? Or, do you give them 30 days to pay upon receipt of the cups?
Begin production. – Next, you’ll begin production of the cups. Do you have assembly lines for different types of coffee cups in a warehouse? Do employees monitor machine production, or do they make the cups by hand? What is your process? Who oversees production? Do you have quality control protocols? How long does production take? To finish the order and get it delivered to your customer in a timely manner, you’ll have to make sure all of your machines and employees are working well and in a timely manner.
Package your products. – As you finish production of the 20,000 coffee cups, how do you package them? Is packaging the final step in your mechanical assembly line or in your employee assembly line? Does your packaging have your company name and logo on it? Do you use boxes, jimmies, packing peanuts, bubble wrap, or something else to prevent breakage? Finally, where do the final packages go to be shipped, and which carrier will ship them?
Market your production. – Here’s where Cups-to-Go can connect to customers through marketing. Maybe you take pictures of your production process to show customers what you do at Cups-to-Go. Then, you post on social media. Perhaps you take professional photographs of your finished product and add it to your inventory for new marketing campaigns. But who will take the pictures? What does your background look like? Do you want customers to connect to a “home-town” look and feel, or do you want them to see a modern, technological, and professional business?
Balance bill. – When you’re ready to deliver the 20,000, you’ll need to alert your Accounts Receivable department to send an invoice for any remaining monies the customer owes and wait to receive the money before you ship. However, if you’ve agreed to give the customer 30-days to pay the balance, then indicate that on the invoice, and finalize your shipment preparations.
Finalize and deliver the order. – Now that you’ve sent the final bill and received payment or promise of payment, it’s time to ship 20,000 coffee cups. Which department does that? Who calls shipping carriers and schedules delivery days and times? Do you have team members who will write thank you letters to the customers or photograph the entire shipment before it goes out?
Follow-up. – After you ship 20,000 to your customer, you’ll want to follow-up with your customer. Will a team member send an email confirmation of shipment? Who contacts the customer once the package arrives to verify customer satisfaction? Do you have a satisfaction survey for the customer?
Whew. What a process, and honestly, I oversimplified workflow processes and systems. How crazy is that? In my office, we currently have over 100 different workflows. Let’s say someone wants to open an IRA. Well, that’s a workflow. Let’s say it’s a Roth IRA. That’s a different workflow. Recently, I had a young entrepreneur doctor hire me to help her buy a practice. There’s literally about 40 different workflows we’ll have to work through to make sure we don’t miss any steps along the way… and missed steps really ruin efficiency.
But why so many? Why have all these workflows?
So how can you implement these workflows? Slowly. Month after month. Year after year. There’s probably no way that your company will have the manpower to create 100 different workflows at once. It’s not going to be that easy. No, it takes years. It takes trial and error. You’ll encounter new situations every day that will show you the need to create another workflow. Creating workflows isn’t a quick, one-step solution for making your business valuable. Instead, it’s a dynamic, evolving system that will help your business become more efficient. As you become more efficient, your business will become more valuable.
In our next article, we will discuss the different types of insurance your new business will need.