One of the biggest questions when starting a business relates to how to operate a business. Business owners usually know their product, service or technology. However, they may not be familiar with the legal, accounting and other required elements of starting and running the business. When establishing business, you will need to make critical decisions on how you choose to do business.
So, the Operations aspect of your business must be aligned with your business model and your marketing strategy, and meet the needs of internal and external users. When you design your business, you are creating the architecture, the infrastructure, the systems and processes that your team will use to:
- Generate sales
- Acquire resources
- Monitor and report on results
- Deliver the products and services to the customer
- Collect and make payments
- Address human resources
- Maintain records
- Record transactions
- Comply with regulations
- Communicate with vendors, stakeholders and customers
- Execute upon all the other functional aspects of the business.
Building Success or Hindering Opportunities
Because your operations can either hinder your success (cost time and money) or can be a competitive advantage for your business (enabling you to align use of resources to priorities, monitor results, and adjust activities), you have to invest time and money into creating your business systems and processes. You need to identify how you want your business to operate and then get the right people/skills in the right positions, and ensure that how you do business makes people want to do business with you is important. Many customers have been lost after the sale to poor accounting, customer services, and after-the-sale activities. Many sales have been lost when prospects seek to do business with you and run into roadblocks caused by the mechanics of your business.
Key questions you should be asking about your operations include:
- Do your operations conflict, or complement, your sales and marketing efforts?
- Do your operations create or mitigate risks?
- Do you view your operations as an asset or a burden that you have because you “have to”?
- Do you have operational goals, and are they tied to business goals and outcomes?
- Do your operational activities support responsiveness to opportunities or do your sales and other efforts get bogged down waiting for information?
- Do your operational activities maintain adequate controls and still allow adaptability to customer needs and market opportunities?
The most successful businesses have operations that are just as appealing as their products. They aren’t constrained by inefficient systems and processes. Because they recognize that investing in their accounting, financial, human resources, and other “back office” activities helps them serve the customer more effectively. It also saves them time and money in the long term.
C.O.R.E. Operations — Build Strong Systems and Processes
Your C.O.R.E. Operations can be a competitive advantage for your business. If your business operations are something you think of as an expense and a necessity only for generating your tax returns, etc. then it is time to re-examine them. If you don’t have an up-to-date accounting system, job descriptions, performance measurements, and compensation tied to results, then it is time to assess the mechanics of your business.
Accounting systems should be able to do more than provide information for filing your taxes. Your accounting system should enable you to know what is and isn’t working in your business. You should be able to identify your most profitable clients, line of business, and products/services. You should know how many prospects you need to reach to achieve your sales goals. You should have goals, budgets, and other information that helps you run the business. Build your C.O.R.E. Operations to serve the customer, monitor results, and decide how to execute to achieve your goals.
Articles and Podcasts
- Where is Your Business Located? Realist Road (9/14/2016) - Normally when I am writing about the location of your business, I am focused on the physical or virtual locations of the business. Today I want to focus on the mental or psychological location of your perspective on your business. In working with clients, the success of organizations is impacted by their leaders’ perspectives on events, opportunities, results, and the future. Leaders tend to locate their businesses one of three categories: Optismist Overlook, Pessimist Place, or Realist Road. Welcome to Optimist Overlook When you visit Optimist Overlook, the business may reside at the corner of WishfulThinking and Hope Is My ...
- Is your Business Performance FINE? (9/1/2016) - Does your day start something like this? “How are you today?” “Fine.” This is a typical exchange that occurs for most of us daily. A variation is going to a networking event or business function and “How’s business?” “Fine.” But is your business really FINE? Financially strong, Increasing customer base, New opportunities to pursue, and Exceeding expectations. In today’s world, many businesses are fine, meaning simply “okay.” They are going along and if not thriving at least surviving. But don't you want more for your business? Wouldn’t it be great if you: Didn’t have to worry about having enough in ...
- Motivate Change to Get Desired Performance (8/31/2016) - How to Motivate Change One of the most basic things we need to understand about change is that it is personal. People must choose to change. People can be influenced to change by external sources (e.g., other people, events); however, for true change to occur and be sustainable each person must choose to change. I spent decades in major corporations that were constantly implementing "change initiatives." Some even had change programs that included rewards and incentives to get the change accepted. In one organization one of my responsibilities became managing a change program for the division I was in. This ...
- Business by the Numbers: Financial Oversight (8/24/2016) - Internal Controls and Financial Oversight When it comes to growing your business, you can't afford to not understand the financial perspective of their business. Whether it is the day-to-day performance, budgets, taxes, or other aspects of accounting for your business, you can’t afford not to do business by the numbers. Financial oversight cannot be fully delegated to employees or co-owners. You have to be in the numbers to monitor results. Unfortunately, for many small business owners, technology creators, and other innovators, the simple fact is that too few are trained on the ins and outs of the financial side of ...
- Check Your Priorities: Real World Lessons Learned (8/17/2016) - Many years ago (I won’t say how many), I had a new boss (we’ll call him “Kevin”). He was actually my supervisor’s boss. Kevin had spent most of his career in communication roles (he created presentations and documents to give to the board.) When Kevin came from a part of the organization whose priorities were presentations (pretty ones) into the department I worked for he was coming into a working group that on a daily basis created transactions that enabled the business to produce products. In my case, I had double duty working with two different groups as their support ...
- Overtime Eligibility and Minimum Wage Increases – How to Survive Rising Labor Costs (7/12/2016) - Changes in Overtime Regulations to Expand Eligibility – the Impact on Your Business The change in overtime eligibility will impact an estimated 4.1 million businesses – small and large across the United States. The minimum wage increase will have varying impact as the amount and timing of increases will vary across the country and some businesses who have a higher number of minimum wage workers will have more significant impacts than other companies. In the long run, every business will be impacted directly or indirectly by these changes. Your business will either be raising wages and rebalancing the workforce or ...
- Is the Glass Half Full? Half Empty? Or is it the Wrong Glass? (6/14/2016) - One of my friends was telling me about a discussion she had with her eighteen-year-old son. They were talking literally about a glass of Dr. Pepper. “Is the glass half full or half empty?” she asked her son. He said he thought she just used the wrong glass. If she had used a smaller glass, then she wouldn’t be thinking is the glass half full or empty. It would be full. This difference in how we look at things makes an important point for businesses when it comes to capacity, staffing, and all the elements of being in business. Perhaps ...
- How to Grow Your Business, One Relationship at a Time – Network! (6/6/2016) - Grow Your Business — Build Relationships Previously published in MWorld, The Journal of the American Management Association Volume 8, Number 3 Summer/Fall 2009 In today’s economic uncertainty, having a solid network can help your organization. However, it isn’t easy to build a network that will reap professional benefits. C-Level Peer-to-Peer Networks Peer-to-peer networking at the C-level is a challenge. Too often, any opportunity to network devolves into a situation where some C-level and non-C-level attendees feel compelled to take the opportunity to pitch, pose, and prose about the “opportunities,” products, services, resumes, and/or latest, greatest thing you absolutely must hear about. ...
- Overtime Impact and Minimum Wage Increases – Labor Costs Rise (5/31/2016) - Overtime Impact from Eligibility Rule Change and Increases in Minimum Wage: Labor Costs Rise The overtime impact from new eligibility rule and minimum wage increases are this year’s hot-button issue for small business relates to rising labor/wage costs. This is a two-fold issue for small businesses and are a result of the Obama Administration’s issue of the new overtime (OT) rules that are effective December 1, 2016. (You can read the new OT rule at https://www.dol.gov/whd/overtime/final2016/); as well as federal and state government initiatives to increase minimum wage rates to $15/hour. The Issue for Businesses - Can The Afford There Workforce? Many ...
- Five Critical Steps to Maximize Resource Flexibility (5/26/2016) - Article previously appeared on Mainstreet.com (2009) Companies of all sizes have historically relied upon their workforce to provide the flexibility necessary to compete. Unfortunately, compensation and benefit costs have created a dilemma - business can’t afford to commit to full-time, permanent employees. While competing means responding to customer demand, it also means not committing too early (or permanently) to resources you only need for a short time. Scaling Up Your Business To grow the business you must find the balance between putting in place the resources needed to grow and the cost of those resources. Move too early or too ...