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5 Small Business Functions You Must Turn Into a Process (Part 2)

Updated: Oct 16, 2019

The core functions of your business must be turned into predictable, repeatable processes in order to achieve maximum efficiency, minimize error and establish predictable profitability. These functions are already taking place, just waiting to be captured, perfected, and turned into the standard operating procedures for your unique business. We talked about the importance of this approach in your new hire on-boarding and sales functions in Part 1. We will cover the final three today: operations, accounting, and customer retention.

3. Operations Process

Operations is a broad topic and heavily dependent on the industry you are in. However, whether you are in manufacturing or IT, the key in developing processes for your operations is that whatever can be done predictably and repetitively, should be. Establishing predictability in your operations process allows you to increase your efficiency and decrease occurrence of errors. Similar to the sales process, a clear operations process will allow you to track key data points, such as man-hours per part produced or error rate for a particular service, that will keep your process self-refining.

It is critical to actively measure and manage your operations process even after they are established. Once the hard work of mapping and writing these processes is done there is a temptation to walk away and assume that the daily execution will automatically go as planned. History and experience tell us this is not the case. According to the website while 69% of companies they studied did have documented, repeatable process, only 4% measured and managed those processes. It doesn’t do any good to do the hard work of process development and then not take advantage of the wealth of information and guidance they can provide!

One other thing to consider with all processes, but operations in particular, is that it often touches most other areas of the business in some way. Ensure that you have an established feedback loop between operations processes and other processes in the business such as sales and customer service. If no one is paying attention, considerable angst can occur from a lack of feedback between adjacent processes.

Suggested Components to Include:

· Order reception

· Order confirmation

· Design clarification

· Time to Completion Updates

· Material Ordering

· Installation/Delivery Scheduling

4. Accounting Process

Ah, accounting. Perhaps unsurprisingly, 40% of small business owners say bookkeeping and taxes are the worst part of owning a small business according to In fact, most businesses, regardless of size, should hire external accounting help in some capacity to ensure the accuracy of their core financial documents. This will ensure you are prepared for everything from the dreaded IRS audit to securing necessary financing for future growth. However, there are still routine accounting functions that are much easier to track when they are part of an established process.

Even with external accounting and/or bookkeeping help, their work is only as good as the information you provide them. Establishing a process for daily habits such as reconciling the cash register, collecting and filing receipts, and checking your cash position, will help make sure that this critical information is collected and doesn’t pile up on you. This will also ensure that it doesn’t have to be you who opens and closes up shop each day. As long as your employees understand the steps in the process (and you trust them!) they can take care of this for you without the business skipping a beat!

Suggested Components to Include:

· Check Cash Position

· Reconcile Cash Registers

· Collect and File Receipts

· Pay Vendors

· Send Invoices

· Analyze Inventory

· Process Payroll

5. Customer Retention

Good customer retention really begins at customer acquisition. However, in the rush to win the customer and keep the promises you made throughout the sales fulfillment process, retaining the customer for the future can get neglected. Here again, the power of process can help - and the payoff is worth the effort. After all it costs 5 times more to acquire a new customer than to keep a current one. Beyond that, statistically, the average customer spends 67% more in his or her third year than they do in the first year they do business with you so it's definitely worth doing what you can to make sure they are still around!

Following up with your customer, both during and after the sale, is a significant but under-valued component of good customer retention. Customers feel that you are taking care of them when you are communicating with them. A hand-written note or a quick phone call to ask how their new purchase is performing for them can turn a satisfied customer into a brand loyalist for a minimal amount of work. Unfortunately, unless this step is hard-wired into a repeatable and measurable process, it is an easy step to overlook in the pressure of new sales. A good customer relationship management software tool can help with features like built-in reminders.

Asking for referrals is another component that should be built into a good customer retention process. A customer who feels like you took care of them is not only likely willing to refer you but will also feel like a part of your team when they are able to help someone else solve the problem you solved for them by connecting them with you.

Suggested Components to Include:

· Follow Up During Sale Fulfillment

· Follow Up After the Sale

· Post Sale Contact (i.e. newsletters)

· Gathering Referrals

· Customer Appreciation Events

Bottom line: systematize as much of your business as you can. Building a comprehensive business operation that can function predictably will pay off personally and professionally for years to come!

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