The One Thing Many Entrepreneurs Forget To Do

Many fast-growing businesses are running at the speed of light, acquiring new clients, handling customer service, tweaking product pricing, doing online promotions, managing employees and paying their bills. This forces many entrepreneurs to work long hours fighting fires on a daily basis and focus less on sustainable long-term plans for the company.

Is there a better way?

Overloaded entrepreneurs would greatly benefit by developing an actionable operations plan for their business. This is a frequently updated document that covers strategy and processes for technology, people, capital/finance, sales and marketing, and, if applicable, supply chains, logistics, and R&D.

At a minimum, a company should document all support processes, such as human resources, payroll, and accounting.

How To Get Started?

The first thing to do is to create a workflow diagram of all company processes, including sales, production, customer service, cash flow management etc.

This exercise needs to be done by each division head and can help to identify breakdowns & bottlenecks in the chain. An action plan to improve these processes can then be developed. Once the overall action plan has been set, each division should identify the weekly, monthly and quarterly activities they need to manage to ensure that they contribute to its execution.

In the initial stage, as company operations are getting streamlined, this plan needs to be reviewed monthly and tweaked as business performance improves. Once operations get stabilized this plan can be reviewed quarterly.

Some companies may choose to have two plans, one for day to day operations and one for longer-term strategic goals. However, both need to be linked to ensure that daily operations enable long-term plans to be executed. Also, no operations plan can succeed without minding the 2 P’s; People & Processes.

People

Making sure you hire the right people seems obvious advice, but what may not be obvious is what “right” actually means for your company.

Very often entrepreneurs hire people based on how comfortable they feel with them rather than those with proven experience in the work they are expected to do. Also, an employee who works well in a certain role may not do as well when shifted to another role.

E.g. the skills to be a great salesperson & a great sales manager are quite different. Ideally, the entrepreneur should have a strong understanding of the skills required for a specific job role and then appoint people who have proven success in executing in a similar role.

With the right people in place, the next step is to be clear to the team on what is expected of them using measurable time-based parameters. There should be weekly meetings within each division & a companywide meeting every month to track progress.

Entrepreneurs should encourage their team members to feel comfortable giving feedback, especially when their views don’t match those of the entrepreneur. It is important to manage this process without ego and constantly be willing to look at better ways of achieving goals.

In the early stages of a company’s growth entrepreneurs handle a lot of operation management themselves. However, as a company scales it is important to hire a key manager who takes ownership of the full company operations from start to finish, leaving the entrepreneur free to focus on tasks that help to grow the organization.

Processes

Once the right people are in place, the team should have a hard look at the current processes in the company and identify the gaps.

The entrepreneur should be willing to discard activities that do not add value to the company regardless of sentiment. Using a data-driven decision process would help with this, as numbers do not lie.

New processes should be documented clearly and shared right across the company so that all team members are aware of what they need to do. This also makes it easier to onboard new employees.

Encouraging transparency within and between departments ensures that all team members work effectively together, and the information is not kept hoarded into silos. Using collaboration softwares like Slack, Basecamp or Facebook@Work could help in breaking down barriers.

Although the processes created are useful to manage the pain points of today, it is important to keep an eye on what will be expected of the company as it grows and build the foundation of the processes that would be needed for these future activities.

Keep Learning

Managing company operations is a never-ending process, and entrepreneurs should keep abreast of new ideas that could help them keep creating new efficiencies. Some useful books on operations that are worth reading are The Goal by Eliyahu Goldratt, Execution by Ram Charan & The Checklist Manifesto by Atul Gawade.

Joining entrepreneur networks is also a great way for business owners to develop new ideas by learning from the experiences of peers.

The bottom line is that handling company day to day operations may not seem as glamorous as planning strategy or meeting potential alliance partners, but this is a key aspect that no entrepreneur can afford to ignore.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.