Simple Processes Create More Revenue – Part II

In Part I we talked about why processes are so much more important to small businesses than even big business. This week we’ll cover just how simple it is to put together a good process that will actually have a significant impact on your business. What we don’t need is more stuff sitting on a shelf – Process Mapping is designed to make us more money and free us up to enjoy the business we’ve created. The Key – KEEP IT SIMPLE! The more info you try to capture, the less likely you are to actually use the process. Just the opposite of what you might think.

Get Started – It’s never too early.

Very few companies get a good start on processes until long after they are needed, which really puts us behind the 8-ball.

The best processes will be easy to expand as your company grows and more processes and procedures are required. If you have to throw out the processes you started with instead of just tweaking or expanding on them, they likely were not good processes or weren’t even being used.

Some typical simple processes you might need – The Macro Project – map your entire company process (very high level/simple), from marketing & sales, through operations & delivery, through accounting/invoicing, to customer satisfaction. Include everything from the beginning of your company’s marketing process to the very last thing you do to complete the process – cash a check, send a thank you, put someone in a tickle file to be called 6 months from now, etc.

Record the Process – Do this on a piece of paper (or Powerpoint, etc.) using boxes with arrows from one box to the next, indicating what comes next in the process. If you end up with more than 20-30 boxes for your entire Macro Process, you’ve got too much detail – combine boxes until you get it simplified.

Check the Process – see if it is actually what you’re doing – as you go through the process, tweak what you wrote down until it reflects reality (don’t record what you want, but what is.)

Color each box – if you have multiple people in your company, assign a color to everyone and color the boxes with which parts of the process each person owns. If you own them all, seeing one color will motivate you to figure out how to get out of some of the jobs that aren’t at your pay grade. How many boxes do you own? Probably too many.

Assign a Pay Grade – pretend each box is a 40 hr per week job. How much would you pay someone to do that job? Put that in the box. (For your own pay grade – If you want to make $200k per year, that’s $100 per hr (assuming you bill 40 hrs per week, more than likely you’ll need to charge $200 per hr to make $200k).

Redesign the Process – We know what the process looks like. What SHOULD it look like. Get it fixed and re-train your people to the new process.

Circle or re-color the boxes you want to reassign first. The first step in moving from being the producer to being the business owner, is to figure out how to get the low pay grade jobs off my plate and replace them with the activities that are at my pay grade. We think we save money by doing the $20 pr hour job, but if you want to make $200k per year, you are losing as much as $180 per hour every time you do that $20 per hr job. Get someone else doing it (using a Virtual Assistant is always a great first step if you’re a small biz). OBJECTIVE – get your color out of as many boxes as possible.

Regular Review – 15 minutes once a month to make sure you’re actually doing what you say you’re doing, and that the appropriate people are well trained on the process boxes they own. Keep changing it to keep it relevant.

Try not to do this with a lot of your processes. Once you have the Macro Process figured out, you’ll probably want to break it down into a few sub-processes: Sales/Marketing, Operations/Delivery, Finance/Accounting, and Customer Satisfaction. Unless you have a very complex delivery, anything beyond this is potentially a waste of time.

One last thing – for boxes that aren’t self-explanatory, go ahead and write a full process description for that box – this will help people actually go on vacation and know the job will still get done. And it will be a critical first step for you to get out of the Producer role and get into the Business Owner role. After all, wouldn’t you rather own your business than have it own you?

Edward Deming said 85% of a worker’s effectiveness is determined by the process he works within, only 15% by his own skill. How well defined are your processes? Get good processes and get off the treadmll.

Small businesses that use processes create a winning environment that puts them in a different class then their competition. And they are more likely to survive and be profitable.