Dec 222011

Starting a small business on the right footing from the beginning

If you’re thinking of starting a small business, have you thought about where you want it (and you) to be in 3 years’ time? Five years? Ten years? It may seem like a minor thing now but it’s really important to think about this because it will affect many aspects of how you develop your business.

One aspect is really critical to grasp – the difference between a business and a job. When you start your new small business it will be – in reality – a job. Why? Because when you stop working the money stops coming in.

That’s because most small businesses are one man bands – you, the owner.  Even if you have one or two employees when you start the chances are that you are the driving force to make everything work and if you’re not there then things quickly decline.

So you need to break that direct link between you and the business as early as possible and that goes right back to how to start a business.  One of the key ways you need to do is start systemising the business fight from the outset. This allows the business to work without you being there. If you don’t do this then in 10 years’ time you will still be critical to the business and it will not function correctly when you’re not around. Is this really what you want? Don’t you want to start your own business so that you can take time out? Go on holiday? Spend time with the family?

Systemising a business does two things – it provides a blueprint on how the business runs so that others can do the day to day stuff, and by doing that it allows you to move away from the coal face and concentrate on building the business up.

So what is systemisation?

It sounds complicated but it isn’t; it just takes a little bit of work to sort out.

First of all, think about how your business will look in 5 years’ time. What sort of structure will it have? For example, there will probably be a marketing department, advertising, accounts, sales, admin, maybe a production department or a team of people who go out and deliver the service that you provide. Draw out a organization chart to show where and how all these people fit together.

When you start the business all these jobs are probably being done by you but to be successful you need to shed the load as the company grows. And to do that you need to do is write out instructions for people to follow – the system.

When starting to write out systems you should do two things. First, start with tasks done by those at the bottom of the organizational chart; second, do the easy tasks those people will be required to do.

The reason for this is the first load you start shedding will be the low level tasks and also when developing systems for the first time it is easier to grasp the concept by starting with simple tasks.

Ok, so let’s take the office administrator as our example. As the business owner you will want to shed a lot of the general admin burden as soon as you can as many of these jobs are easy to do but time consuming.

Listing out the office administrator jobs we have:

  • Opening the office up in the morning
  • Sorting and filing the mail
  • Dealing with phone calls
  • Dealing with faxes
  • Taking telephone messages
  • Booking appointments in the diary
  • Closing the office at the end of the day

etc etc

For each of these tasks we need to write out how it is to be done. By doing that we get a structured, repeatable way of achieving the task and an easy to follow guide that can be used by anyone (for example if the administrator is on leave and a temp is employed to fill the gap).

Let’s look at opening up the office. The system might look something like this:

  • Unlock the door and switch off the alarm. The alarm panel is in the cupboard behind the door. Key in the 4 digit code then press “De-activate”.
  • Go to the kitchen area, fill the coffee machine and switch it on (coffee is kept in the cupboard under the machine).
  • Go to each desk and switch on each PC.
  • Check that all the printers are stocked with paper. If more paper is required it is kept in the same cupboard that houses the alarm system behind the front door.
  • Pick up all the mail and place it in your in tray for sorting later (see page 7 for how to deal with the mail).
  • Check for any faxes that have arrived overnight. Put them in your in tray for sorting later (see page 9 for how to deal with faxes).
  • Check around the office to make sure there is no rubbish and that everything is tidy and ready for the business day.
  • Turn the sign on the door to “Open”.
  • Turn on your smile and be ready for the first customers!

Now this is a simple example but it highlights a few points. The first is that you can’t get too detailed in these things. You might know where the stationary is but a temp or a new employee will not. If it’s not explained in the system the only alternative they then have is to come and bother you and the chances are that if it’s something even slightly complicated you’ll end up saying “Oh, I’ll do that”. Before you know it you’re employing someone and doing the work yourself!

If you want to know how to run a successful business all you need to do is look at a franchise operation.  Franchise companies are masters at systemisation – they have to be to make the model work.  by having all the systems in place they make running a successful business almost as easy as following a checklist.

Systemising the business might seem like a huge thing to achieve but it can all be done in manageable bites and indeed this is the best way to do it. Start doing it early and make a conscious effort to do a little bit each week and before you know it you will have a big folder of processes that anyone can follow.