One of the most asked questions to me is “Do you have any advice to a new business owner?” – my typical advice was always “Be a Pesimist. In business, you should always assume that things will go wrong – it’s the only way to prepare yourself for when they do.”
But I was wrong. That’s the second best peice of advice. Lately, I’ve been working on a new RIA development project that will revolutionize how small businesses operate, and a core aspect of this application has made me review the reasons that my own businesses have succeeded or failed; and more specifically, where they’ve failed, what was the cause of this?
I realized that the main reason I failed was because of a lack of business automation. I realized the second reason I failed was because I didn’t preapare for the first reason – I didn’t develop what I like to call ‘workflows’.
Each resource (whether it be a pencil, a client or an employee) that enters a business has a specific flow it should always follow. These flows are completely mapable and are typically predictable.
There are many different ways to refer to an element’s workflow, such as a life cycle.
As a good business practice, every object and/or resource of a business should be given a life cycle. Every action taken through the business should be given a workflow. There are many reasons for this, and I will go into these in detail.
Workflows and life cycles are the building blocks for process and business automation. In these times, business automation is becoming more and more prevalent as it helps allow less people to do more work in the same amount of time. As a fresh CEO, you are going to be absolutely overwhelmed with your responsibilities. Establishing workflows can help you avoid that overwhelming sense of utter doom every time you sit down to do your books.
And, lets face it – you’re the CEO. You like things being done your way, and as a small business owner, they always get done your way, because frankly, you’re the one who’s doing it. But what happens when you hire a new employee to take over some of these responsibilities? Do you think they will complete the tasks the way that you expect, right off the bat?
If you establish these workflows now, before you hire employees, you can figure out what works and what doesn’t work. You can determine what needs to be done every time, and what doesn’t – and you can make sure that you are consistent as a business unit.
Training Time is reduced as you’ll know every step of every task. Most of the tasks that I do I just do without thinking – an employee may not have the same intuition. Humans love repetition – it allows them to get good at what they do, and keeping tasks consistent allows employees to become proficient.
Control and Decision Making is left to management. Your employees just have to follow your instructions instead of trying to generate their own flows, meaning critical decisions stay within the control of the business owner and management teams.
Consistency is guaranteed (to a point), as long as the flows are followed through.
Productivity is increased dramatically.
A key point of Business Automation is determining which work flows can be automated. (taken over by a computer instead of a person) This can reduce your overall amount of work while increasing productivity.
The need of constant supervision decreases over time. As your staff become more proficient in repeating the tasks required of them, they will require less supervision. If you do not have established workflows, typically there must be a manager present at all time to manage every aspect of production.
And as for products, physical resources and supplies, start thinking about their flows as well – a pencil, for example, goes from ‘ordered’ to ‘in inventory’ to ‘removed from inventory’ to ‘consumed’.
If you start monitoring these items now, you’ll be able to track the lifespan of these items, and by doing routine research you’ll be able to predict your expenses. If you know that a pencil lasts around 13 days, you know you’ll need to buy one for every 13 days.
Remember that one flow may have multiple branches – a pencil can also be stolen, broken, etc. so you should try to map out every possibility. It’s your job to be prepared, after all!
(Don’t have a headache yet? Wait until you start realizing that some flows directly interact and depend on eachother, like an employee and a disciplinary action flow!)
Ultimately, you need to remember that employees really don’t want to think for themselves. They expect you to think for them – and in order to grow, you’ll need to hire them. So make their lives (and your life) easier, and start mapping out all of your workflows es and lifecycles!
