It’s common knowledge that starting a business is pretty tough. The first five years are brutally hard. Initial investments have to be paid off and you have to get traction pretty quick if you’re going to be able to pay of your debt and make a living. It takes a lot of hard work and planning. It takes enough capital to bear through the first few years to support yourself and to finance a growing business.
But even if your business is able to make it through the first few years, most businesses never work as well as their founders dreamed. Michael Gerber, small business guru and author of The Emyth Revisited, writes that 86% of businesses fail, even if they make can make it through the first 10 years. These owners never achieve the hopes and dreams they had for their businesses when they first got started. They pour all of their money and all of their lives into a dream that often turns out to be less than they expected.
Why? Because in almost every business, most things rely on the owner(s).
Why? Because the owners are missing the necessary tools to be able to replicate what they do through other people.
The owner is unable to grow the business beyond the dependency on themselves and key people in the organization. The business gets to $1 million or even $5 million in revenues and then hits a virtual wall beyond which it seems impossible to grow. There are problems with keeping the workflow running smoothly and consistently. Efficiency is only happening through 20% of the employees and they’re working as hard as they can. Things seem to be chaotic and out-of-control. To scale a business beyond this virtual wall, a business must implement standard operating procedures for training, task delegation and accountability. The business owner and key managers need to spend time, working ON the business processes. Only in this way will the business be able to replicate the skill and efficiency of the key people and in doing so create a business that is dependent upon the businesses processes as opposed to the key employees in the business.
With that in mind, most business owners begin the systematization process and fail. They are unable to systematize their business because they don't have a systematization plan. This is not a business plan, although that is also a very important tool in the development of any business. The systematization plan is simply a tool for discovering, prioritizing, documenting, implementing and managing all of the processes in your business.
Last week I spoke about the 5 steps to the systems development plan. This week I promised to talk about the 4 key functions of every business and go into more detail on how to accomplish the first step of your business systemization plan, Process Identification.
THE FOUR KEY FUNCTIONS:
Identifying All of the Systems in Your Business
Your business, every business, has 4 key functions:
- Sales - all of the sales, branding and marketing systems.
- Operations – all the systems for delivering on the promise made during the sales process; systems for client fulfillment, production and customer service. All of the systems that directly relate to what you do for your clients.
- Administration – The systems that go on behind the scenes such as invoicing, paying your bills, collections, hiring and firing, preparing financial statements, budgeting and cash flow projections. Essentially all of the financial, administrative, human resources and IT systems.
- Leadership - And finally the strategic systems for leading, managingand guiding the business from where you are today to where you want to get to.
Process Identification – Naming and Organizing Your Processes
Let’s start with the sales end of the business - GETTING the Business.
Selling is really composed of three different categories:
- Target Market Development
- Advertising and Lead Development
- Conversion of these leads into new client's.
Target Market Development is the clear understanding of your ideal prospects or clients; who they are, how they think and behave and where they are located. When you have a definitive understanding of who your best prospects are, you can create a message that will attract them to you in your lead generation activities. Target market development is all about discovering that message as well as the proper channels for delivering that message.
Advertising and Lead Development are all of the systems for putting that message out into the appropriate channels to develop interest in your product or services. Examples of channels are billboard advertising, Yellow Pages advertising, television commercials, direct mail, word-of-mouth and referrals, sponsored search, organic search often referred to as SEO, and other Internet advertising. It could be “pounding the pavement” and knocking on doors or cold calling to get new opportunities. All of these are advertising or lead development activities or processes.
Sales Conversion is the conversion of these qualified leads into long-term loyal clients.
The more effort you put into target market development, lead development and advertising, the easier it is to convert these qualified prospects and clients. When qualified prospects contact you, they've already made the subconscious decision to buy your product or service. It is in the sales conversion process that you provide your prospect with the conscious justification to buy from you.