One reason many people start a business is to make their money work for them. If that’s your motivation, then this article is a must-read for you. To make money work for you a reality, you need to introduce systems into your business operations. The structure you create will ensure that your business can run in your absence. Below are a few steps you can take to build a sustainable business.
Setting up your business to run in your absence frees you to diversify into other markets and have time for family. Even if you are still actively involved in your business now, you should set your mind on building it to thrive without you. To do this, you must first structure your business.
You may have started your business as a side hustle to augment your income, support your partner or survive when in-between ‘jobs.’ However, if you have served and are still serving people through your business and even have a market to provide value for, then this means that you have a business that you should structure to thrive.
No matter how small your business is now, don’t lose sight of the big picture. Don’t be content with the result you have gotten so far. Work towards setting your business to operate without your direct involvement. This goal can be achieved with the right structure, systems and people.
In the subsequent parts of this 5-part series, I will show you how to set up your business to run in your absence.
Define your ownership structure
There are two types of structure: a business structure and a structured business. A business structure refers to the legal standing of your business. What kind of business are you running? Is it a sole proprietorship? A limited liability company, an NGO or a partnership? Defining and articulating the type of business you are running will help you put the right system in place, especially when it relates to taxes and certifications.
You should consider where your business is at the moment and your goals for the future and determine the type of ownership structure that will be suitable. A sole proprietorship may be useful in helping to make decisions fast and to take on all the risks and profits, but it may rob you of the benefits of the funding and expertise that partnership can provide.
In the same way, a partnership may provide you with more money; but might also leave you to face the hassle of managing different people and the risk of being bought off of an organization you helped to set up. Therefore, without much ado, you need to decide on the approach you find suitable to you best that serves your purpose. You could hire an external consultant as a sole proprietor and ensure that you have a watertight agreement when you are going into partnership.
In the same vein, if you are starting, first things first! You need to go and register your company bearing in mind to choose the right structure that suits your business. Opening a bank account is equally an essential part of this step. You cannot scale or automate your business if it is not a recognised legal entity. There are too many opportunities for growth that you will miss out on if you do not regularise your organisation’s standing with the appropriate regulatory authorities.
Build sound operational structure
The second type of structure is referred to as a structured business. This structure comprises your tripod of success – People, Processes and Technology. All three must seamlessly complement one another. Set up the systems that support the operational relationship between people, processes and technology. The purpose of the tripod is geared towards achieving the strategy and financial goals of an organisation.
A business system comes alive through your processes and procedures. This operating system is the engine that powers, connects, controls, guides and balances the network of activities within an organisation. It facilitates a seamless workflow and provides the building blocks that support the achievement of overall organisational goals.
Setting the right structure in place is the best way of making sure your team have the right tools to work with, know the steps to take to get any result and are delivering their best on the job. No matter how small your business is, you need to set up the right structures to grow, and not wait until you are big before setting it up.
A winning mindset as a startup is to start running your business as though it is an established organisation. The first step to implementing this philosophy is by institutionalising your processes and procedures. Begin with the end in mind. Start documenting your activities in such a way that any new employee can read, model and implement the same steps you took to replicate your success. Then analyse, measure and repeat the process.
Hire & transfer competence
Your people are your greatest asset. If you desire to grow your business and meet your financial goals, then you must pay attention to the quality of your recruits. Focus on the professionalism, competence and experience of the team you hire. Make sure you employ the people who can fit into the culture of your organisation.
You need to hire the right talents that will use the systems you have put in place to deliver the projected business goals. Without the right expertise, the best systems and structure are useless when applied to grow your business. What you must not do is to recruit based on sentiment; put your money where competence is!
When you have a team, identify and groom exceptional employees that have demonstrated capability, reliability and integrity and commitment to their training. Start with their mindset shift, then skill and expertise transfer so that they can run the business in your absence. Subsequently, enforce the use of your documented standard operating procedure and processes for carrying out your business operation.
Finally, use technology to leverage productivity. Technology will help you also monitor your staff activities and make your operations to be more efficient. Be clear on the type of technology you need as not all technology is for every industry. Choose what works for you, then document and automate the steps for every activity and monitor progress.
These days, there are industry-specific software and technology that you can use to speed up your production and service delivery. Some will help you automate your business and free your team up to focus on the other aspects of your business. Investment in such technology saves you time and money. It is crucial to prioritise this need for a time when the company can afford to invest in technology.
Many small business owners still think that a website is for big brands, but that’s not true. Having a properly designed website is your access to the global market where the world trades. When properly designed, your website transforms into a powerful tool that can help simplify your sales, marketing and CRM process. Maximise it! But if you don’t have the means to acquire one now, leverage on the free social media platforms to create an online presence for your brand.