Small Business Development Blog

Systematisation Process - Phase 2: Discover & Document

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Build Business Systematisation From The Truth

Get Visual Representation & Confirmation Of Your Current Workflow Processes, Organisational Structure, Volume Capacities, Profit Model, and Utilisation Rates! 

Phase 2 of the mimosaPLANET^TM Systematisation Process is; Discover and Document. Discover and Document is all about facing the facts! It's about taking a good look at what you are currently doing and writing it down in a way that it stares you in the face and shouts ... "this is the truth about our current situation and the results we are getting, and if we continue to use ‘this way' of doing business what is the best result we can expect based on our current and future resources" . Get the facts so you can make great decisions about ‘how' you will achieve your business (and ultimately personal) goals...

systemBOOST^TM

Discover & Document

The whole idea in this phase is to build understanding and clarity of your current situation. It is also vital to remove the list of excuses or ‘reasons' you and others may have about why things are the way they are. Ditch the denial and face the cold hard truth. Nothing does that better than taking stock of where you are currently and actually determining what the capabilities (and limits) of your business are. Here's a list of the tactics in this phase...

• Our Current Work-flow Processes (Flow-chart and time delivery)

We do this by first documenting flowcharts of your current work-flow processes... you know, the steps from phone call to sales, from order to delivery, from invoice to cash in the bank, etc. It is also about getting copies of the different forms and paperwork involved at each step (or software functions), and the different classification types of work (or options) involved... that each cause a different series of events, tasks, steps, and outcomes.

• Our Current Company Structure - Organisation Chart

Again we simply record the current Organisations structure, every company has a CEO, a Marketing Manager, a Sales Manager, an Operations Manager, a Finance Manager.... (and assistances' and team members in each of these ‘departments' .... The real question you need to ask yourself is "who fills each of these roles?" Do you, as the business owner, have the title of Managing Director but really, like many businesses, you have most of your team focused in the operations area (doing what it is your business does) so you are also the; Marketing Manager, the Sales Manager, the Operations Manager and the Finance Manager?

• Our Current Volume Capacities

Now that you have documented your Work-Flow Processes and Charted the Positions and who owns them in your business... you can start to determine, based on past & current workloads, what the volume capacities of each person, role and then the organisation is in the businesses current format.

• Our Current Profit Model

We can input into a ‘Profit Model Spreadsheet' some basic financial details (found in your Statement of Financial Performance (Profit & Loss)), plus sales & marketing KPIs (Key Performance Indicators like; conversion rates, number of items/units/transactions/ or invoices for the period etc). This data will help to serve as a base model. We can then simulate what different results are possible with increases or decreases in each of the recorded areas. This is a very powerful visual representation tool every business owner should have & review, get your copy in Profit Margins & Pricing Strategy

• Our Current Utilisation Rates  

By asking questions we can then run some calculations to determine how efficient we are currently from different perspectives; over all, at each position level and for each of the tasks. This information gives valuable insights into HOW to get better results and WHERE to focus your energy. It also raises big questions about the viability of the whole structure and model of your business and challenges the ability of your business structure & model to become the vehicle that delivers you the results required to meet your personal goals and lifestyle dreams.

i.e. If we are only running at 50% utilisation we can be sure that we have lots of capacity to increase sales or production or output with our current resources. Whereas, if we were running at 95% it is fair to say we are running at, or close to, maximum capacity so if we want to increase sales and profits we would have to first invest in additional resources (another team member or perhaps a new machine or new premises). This assumes we will be running the same ‘way' of doing things.... The next phase of the mimosaPLANET^TMSystematisation Process is to ‘Initiate A Revolution'. Basically... to challenge your whole way of doing business, because chances are that you could be doing things the hard way! After all.... you don't know what you don't know.

I have covered all of the above strategies in more detail in previous issues of the mimosaWEEKLY TIP^TM , follow the below links for more details...

Systematize Your Business Processes

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  • Our Current Work-flow Processes (Flow-chart and time delivery)
  • Our Current Company Structure - Organisation Chart

Profit Goals

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  • Our Current Volume Capacities
  • Our Current Utilisation Rates

Profit Margins & Pricing Strategy

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  • Our Current Profit Model

Now is the time for you to link the thinking of each of these strategies together to really drive the systematisation of your business. Remember strong systems can be the difference between; working 60 hours per week with no chance of a holiday ... and ... working 32 hours per week taking 8 weeks holiday a year.... Or not working at all even. It is also the difference between selling your business for 2 times EBIT and 4 times EBIT. If your EBIT is $300,000, that's the difference between selling for $600k and $1.2m. It's the difference between, settling for average results, and reaching your desired personal goals.

This week's Action Points...

Set aside 5 hours a week for the rest of your business ownership life and use this time for Business Development, the oldie cliché could never be more relevant .... Working ON your business not IN your business. Why not move the cliché from empty words to reality by quantifying it?.... 5 hours per week is what I ask of my clients. If you needed more inspiration or proof and want to see some of their successes and results (from taking this approach of working ON their business)...