How Fast Growing Companies Make a Process Mess and How to Fix it
The Growth Hangover and the 5 Systems that Will Change Your Small Business
My name is Sarah Becker and I am the owner of Clear Simple Business where I specialize in helping organizations build, repair and optimize processes so they can get back to doing what they do best. I have experience working with a Fortune 500 retailer where I have a solid track record of reducing the amount of time it takes to complete a task by 50-75%. Most recently I reduced the amount of time it took to create a weekly business status report for a VP in IT from 1 business day down to 30 minutes. I have also reduced a marketing billing process from 3 business days down to 1.5 business days. I accomplished these by automating the process as much as possible and reducing the number of touches. Not only do I look for opportunities to increase the speed of processes but also opportunities to reduce the number of touches leading to a reduction in error.
4 types of pain
When you’re dealing with painful processes there are 4 types of pain. People pain, process pain, product/services pain and profit pain.
You have finally reached strangled growth. The choke point. You have your foot on the throat of your own business. You’re putting out fires every day. Your growth has stagnated. You can’t see how you or your employees can handle taking on anymore work.
My Friends, you now are the luck owner of a Frankenstein process. What started out as a beautiful process of your dreams has now turned into a hideous and repulsive burden.
Your Frankenstein process is taking over your life and your employees lives. Your employees are the ones who will feel the pain first. They will become overwhelmed and leave. Leaving you with even less time to deal with these monsters.
Now that is not a pretty picture! How do we stop this from happening?
Here is a list of the 5 systems I have found to be most important for businesses to run smoothly.
These 5 systems are:
HR Organization System
Product/Service Replication System
Every company needs a billing system. Without taking in revenue, businesses don’t exist for very long. In order to be making money you need to get paid for selling your products or services!
This is also, hopefully, a process that is going to be repeated time and time again! It is essential that this system is as automated and efficient as possible as well as scalable. If you’re selling 10 products a day today, you setup the system as if you’re selling 1,000s. If you’re selling a 1,000 products a day, you setup the system as if you’re selling 10,000 a day. Trust me, your future self will thank you.
Now you would think setting up a billing system is pretty obvious. Sarah, come on, of course everyone setups a system for getting paid by their customers. Not true. I worked with a customer who had some clients who hadn’t paid her in 3 years. 3 YEARS. The thought of setting up a process was soooo painful, that this client would rather not get paid, NOT GET PAID. The reason you’re in business is to get paid!! However, she would rather not get paid, than take the time to think through what was needed to setup and bill clients.
I came in and worked with them. We talked through what was needed and setup a very simple go forward process that resulted in her only having to spend a few minutes per customer and they were setup for life. They would be billed automatically each year. Unless something changed (client cancelled or prices went up), she would never have to touch that customer again after the initial setup. Pretty sweet deal! We also analyzed the past due payments and found $12,000 in lost revenue. Now $12,000 probably isn’t a ton of money to most of you, but that could have been a vacation to Hawaii for you and your family, maybe you received a bill for tuition, that $12,000 would have come in handy paying that. Or how nice would that $12,000 have been to have during a slow month? Now, she doesn’t have to worry about $12,000 slipping through the cracks.
Images: E-Myth book, My Org Chart
Refer to an organizational chart and roles and responsibilities.
Has anyone read the E-Myth by Michael Gerber? If you haven’t, I really encourage you to go out and get the book. He has some great stories in there that really bring these situations to life!
Within the book he has a very good section on creating an Organizational chart. And honestly, at the beginning of the section I was thinking, this doesn’t pertain to me. I’m operating a one-man shop; I don’t have any employees. Yes, I suppose I do plan on having employees in the future, but that’s a long way away and I’ll figure that out when I get there! By the end of that section I realized how wrong I was!
Having an organization chart truly provides clarity and structure to your organization. It doesn’t have to be large, for example, here is mine.
Lucky for me, I’m filling all the roles! And it does seem a little silly to create an org chart when you’re the only one in the organization; however, the clarity I gained on my business is huge.
An HR system is essential for all small businesses. And it’s extra essential if you’re starting out as a partnership or with a handful of employees! People need structure and an understanding of what your expectations are of them. You have a clear vision of where your company is going, but unless it’s written down, others can’t follow you. As Michael E Gerber states: “If everybody’s doing everything, then who’s accountable for anything?”
Following Michael E Gerber’s path, after you’ve mapped out your organizational structure, you start at the bottom and start working in your business which will eventually lead to the shift of working on your business. You start by living in these positions and creating best practices and employee operations manuals for each. For example, while working as the communications manager. You identify the best words and phrases for communicating to your clients and when to use these. You create a Communications Manager employee operations manual documenting this process. You use this manual and perfect the processes as you’re acting as the Communications manager. Then when you’re ready to hire someone to take over that role, that person lives by your communications manager employee operations manual. They send the same communications in the exact same way that you did and the customers are happy and impacted in the same way as they were when you were doing the communications. Creating the process and manual for the Communications Manager position and hiring someone into role has now allowed you to move onto researching and creating an employee operations manual for the next position. You work through the same process with this position and then the next and then eventually you have setup your business in such a way, that you are able to transition to working on your business full-time rather than in it. You can now be the strategic thought leader your business needs to grow without having to worry about the operational needs falling through the cracks.
Communication systems consist of internal and external communication.
Especially where the client communications are concerned, you want to automate this as much as possible. When you are starting out and you have 5 clients, it’s incredibly feasible that you can send personalized messages to each of them; however, as your business expands and you have 50 clients, plus you’re overseeing the operations, ramping up your marketing, you’re onboarding another employee, typing up a job description, or putting out the “fire of the day”, client communications will start slipping through the cracks. Which then leads to lost sales and unhappy customers.
You also want to have easy to use internal communications systems setup.
System 4 – Product/Services Replication System
Last but not least, is the Business Intelligence System. The reason that I list the business intelligence system last is not because it is the least important, but because it draws from the previous systems.
Because you think or feel that one situation happens all the time, does not mean that it is the norm for your business. For example, while working for a local retailer we were working on updating our intake process. All I was hearing was, we have to do it this way because we ALWAYS get requests that impact multiple modules and always go the long route through our process. After pulling the numbers, I was able to determine that, actually, about 80% of our requests only are associated with 1 module and are completed in the first step of our process. It’s only 20% of our requests that impact multiple modules and go through every step in the process. Now 20% is not quite ALWAYS. However, it’s the squeaky wheel that gets the oil or in this case, it was the requests that took the most effort and time that were associated with ALWAYS, even though the reality was, we did very few of those. So let’s not build a process centered on the exception.
Where this could relate to your business could be in marketing. The rage is to do social media marketing, but how do you know if it’s working? How do you know if it’s working better than your current marketing strategy? You figure out the goal of your marketing campaign. Do I want to increase sales with it? Do I want to create more brand awareness? Get more followers? Get more engagement, Likes, Shares, Comments, etc.? And then you track it. You want more followers, track how many followers you have now, run your campaign, track the number of followers at the end of your campaign. Run multiple campaigns, tracking the beginning and end states, and then you can see which ones worked and which ones didn’t. This will allow you to make educated decisions on where to best spend your marketing money rather than throwing it down the laundry shoot and hoping that it lands where it’s supposed to.
Having a foundation
All of these systems provide a small business with the foundation of how their business runs. You can have the most amazing product or service. However, if you don’t have the foundations setup your business is likely to crumble.
Take for instance the most amazing winter jacket! This winter jacket is light weight, but keeps you piping hot. It’s wind proof, not a lick of wind gets through it. It is long enough to cover your behind and the hood is made just right so that when you’re walking into the wind, it doesn’t fall back at all.
Now you’ve created the most perfect winter jacket, but you live in Texas. Ahh, that’s not going to work! Texans don’t want a hood that stays on their head. They want the wind blowing through their hair to help them cool down! Your amazing winter jacket is really only the tip of the iceberg.
You can have the greatest, most amazing product, but if you don’t have the foundations in place, the bottom of the iceberg. It’s going nowhere. This jacket needs a support system below it to help it flourish.
It needs marketing to help understand where the need is.
You need to have a process setup to ensure that when your customer purchases the jacket that equals you getting paid (Billing System).
Your employees need to understand the role they play in creating and marketing this jacket and supporting the sales (HR Organization System).
Also you actually only have 1 perfect winter jacket. If you didn’t document the process for replicating that jacket, you are only even going to have 1 perfect winter jacket. If you didn’t document the process for replicating this jacket exactly, how are you going to be successful when you move up to Minnesota and start selling this amazing jacket to hundreds of thousands of Minnesotans? How are your manufacturing people going to know the exact process of creating that perfect hood that doesn’t fall back with a strong gust of wind? How are you going to make sure you don’t disappoint your customers with a subpar jacket that doesn’t live up to the standards of the original one? Every little detail needs to be documented to ensure that each of your jackets are as high a quality as your first one. (Product Replication System).
You need to understand how your jacket is selling and where your best leads are coming from (business intelligence system).
When to bring me in
A good time to call me is if you have employees quitting because they can’t handle the long hours and high stress, business operations falling through the cracks, financials are not being submitted, if clients aren’t getting billed or receiving their products, if you’re losing clients because the quality of your products or services is decreasing or you’re having compliance issues, these are all signs that your organization would greatly benefit from the setup of clear and simple processes. These processes are the glue to getting your business back together.
Here at Clear Simple Business I will work with you to ensure that your foundational systems are setup and running as efficiently as possible.
We will sit down together and go through a ½ day or a full day Process Improvement Strategy Session focusing on the 5 systems I highlighted throughout this presentation. At the end of our Process Improvement Strategy Session you will have a full understanding of your current state as well as a detailed plan of attack on how to move forward with your business.