How To Manage Your Business More Easily
A well-managed business runs profitably, keeps the customers happy, all without significant effort from you.
Why would you want this? Well, if it’s not obvious, first of all, a business that effectively runs itself is a lot less hassle.
You can live your life with a great deal of freedom while your business produces your income and also grows in value as an asset for you.
An asset that will prove itself again when you sell your business.
An investor will put greater value on a business that can be run hands-off. If it needs your personal skills and knowledge constantly to keep it going, then he’ll need to replace you.Manage your business so it works without you
And if you’re too important to the business, there’s likely to be an extended handover period where you need to train your buyer how to keep things running. It has been known to prevent a business sale.
So a well-managed business is easier to sell and is likely to be worth more. And it’s achieved by creating effective Control Systems.
1. How Do You Manage A Business Well?
Every business that experiences growth will hit management problems at some point. If you do not have performance standards and operational processes to consistently handle the volume of work, mistakes will get made and tempers will get frayed.
The solution is to decide upon your performance standards and to systemise your business with procedures and methods to get the work done in the right way at the right time with minimal cost.
A systemised business takes all of the decision-making about ordinary, everyday occurring things and makes sure they get done correctly every time. It’s almost a utopia for a business owner when you achieve it, yet it’s within grasp for most businesses, if only you knew it.
For example, a property management firm that is slow at getting new properties vetted, prepared and marketed for new tenants might introduce a Performance Standard that states how quickly they get it done, and a process to make sure it happens.
The business owner can then manage the process of bringing new properties to market by somply reviewing the process to see if anything has slipped, and take action where necessary.
The goal is to manage by exception, rather than hands-on operational management of everything that’s happening day to day.
By following a system, fewer problems occur because the system is designed to handle all normal situations.
Management only needs to get involved when things happen that are out of the ordinary. And if a particular kind of problem keeps occurring, the system can be expanded to handle that, too.
In this way, you gradually improve the performance of the business and become less and less involved in the day to day running of the business, until it pretty much runs itself.
So a quick recap – your business needs to have systems to control the way it runs. These systems comprise a number of elements…
– Performance Standards – are the expected outcomes or behaviours
– Operational Procedures – are the methods that your business (and staff) use to get things done on a day to day basis
– Progress Tracking – provides visibility of performance of the Operational Procedures and lets you know if there is any danger of your business failing to hit a Performance Standard.
2. What Needs to be Systemised?
To manage your business well, it pays to introduce systems across the board. When working with clients, we start by focusing together on the areas that will provide the biggest benefits in terms of either profit or reducing chaos and mistakes. A complete list of the areas to systemise will include…
Self-Management – managing your time and your task list so that you work efficiently is key to growing your business
Finances – monitoring cash flow and keeping on top of credit control, reviewing monthly management accounts to maintain strong margins and budgeting for expenditure and sales are essential to take control of your accounts
People Management – setting performance standards to define the culture of your business, building a recruitment system to ensure you attract and employ great people, setting targets for the business and individuals, how the team meets to review performance, how you deal with individual under-performance issues, and how you develop your staff are all essentials systems for people in your business.
Marketing – Turn your marketing from a series of activities into a system for generating leads and following up to make more sales with your customers.
Sales – The way you sell, whether through sales people or online, can be systemised to maximise sales performance. Offline it’s all about the sales process and how you attract, select, motivate and manage salespeople. Online it’s how you drive traffic, produce leads and sales. And for both, you’ll probably want a system to sell more, and make repeat sales.Operations – the core operations of your business, whether it be manufacturing, retail or a service industry, can be systemised so that it works without constant management interventions.
Customer Service – to deliver great service consistently there will be specific customer service standards and procedures, from always smiling and making eye contact, to how you welcome a new customer onboard.
3. Run Your Business by Remote Control
Once your business is systemised and running smoothly, you can move towards running it remotely, without your involvement at all on a day-to-day basis. To achieve this, you’ll need to two further elements in place.
Element 1 – General Manager – to handle those out-of-the-ordinary situations that occur from time to time, and who you give sufficient trust and authority to take decisions, within the framework of your systems and standards, to keep the business running well.
Element 2 – Dashboard Report – giving you the performance of the business in one or two pages, from which you can easily identify how well the business is running, any issues that have occurred and how they have been handled. This would typically be produced on a weekly basis.
Ultimately, a systemised business with a general manager and regular dashboard report is a business that can work profitably, reliably without you.
Not only will that business be a valuable asset should you decide to sell it, it will also be an easy business to replicate if you want to open further branches in new locations, or indeed to franchise the business to produce massive growth.
Want to Make Your Business Easy to Manage?
Click here to get in touch and request a 45 minute business strategy session, where we can talk about the strategies required to grow your business, and figure out whether we should be working together to make it happen.Contact Lee