Entrepreneurial Illumination

Over a decade I have been involved in different ventures and enterprises. Some have failed and some have succeeded. On a daily basis I solve business problems and advise entrepreneurs. Some of the lessons learnt and insights garnered are chronicled in my Entrepreneurial Illunmination Series.

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Business Control

This article is on maintaining business control. Often, business owners are in charge of their businesses at the inception. They understand every activity going on. They tend to keep up with the small number of workers and customers they serve.

However, the dynamic changes when business moves from startup to growth phase. The number of workers increase, the customer base increases and revenue start pouring in. At this point most business owners tend to want to handover control to other managers and consultants. This sometimes changes the operational structure of the organization in a way that the owner might not have envisaged.

Except you have built a very robust systems and have loyal and committed staff, it is advisable that you still maintain control of your organization.

“Every business owner is responsible for the success or failure of the business…Maintain control”

Never turnover complete control of your company to anyone! As owner, and head steward, you should retain responsibility for your own company.

Learn to democratize power and authority within your company. No single individual should monopolize data, system, decision making and resource control.

King Solomon says “Confidence in an unfaithful man in time of trouble is like a broken tooth, and a foot out of joint”.

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Mission Statement

Today I want to highlight the importance of having a mission statement. Mission statement drives your business organization and determines its outlook.

Every business owner must define what s/he is set out to achieve and how s/he intends to achieve it.

In the process of defining your mission statement, you will begin to picture in your mind all the processes and systems that have to come into play in achieving it.

“If you can’t describe what you are doing as a process, you don’t know what you are doing” – W. Edward Deming

You need a written mission statement for your business. This is the substratum upon which other documents are based. All the processes and systems that run your organization should not reside in your brain computer only. You’ve got to download it into manuals, policies and checklists. Otherwise staff will continue to disturb your life trying to retrieve information stored in your brain computer.

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Systems and Structures

Today, I like to briefly illuminate you on systems and structures. Every organization is built around systems and structures. As human beings, our bone structure determines our shape and our organs work continuously and interact seamlessly to determine our health system. The same is applicable to our business organizations.

“The strength of every organization is determined by its Systems and Structures”

At the center of your processes are mechanisms that guide their operations such as procedures, policies, checklists etc. When these mechanisms interact, like a gear, they produce a System which is documented and called Operating Manual.

Every member of your organization must have easy access to it and be trained in its use. This will empower them to do their job with minimal supervision.

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Entrepreneurial Continuum

It is often said that 95% of small businesses die in the first 5 years. One of the reasons is because many fail to transcend the entrepreneurial continuum.

“There is a difference between ‘Trading’, ‘Business’ and ‘Organization’.”

At trading level, your processes are mostly undefined, loose and spontaneous. At business level, your processes become more defined and aligned into systems. At organization level, your focus is on aggregating systems into functions and assigning resources to manage those functions in a well structured format.

Any entrepreneur that understands this will build a legacy organization.

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Proper Business Hygiene

Hygiene is one thing that is very important to all humans. Proper grooming and healthy personal habits can prevent illnesses and give a good feeling.

This applies to businesses as well. Every business owner must focus on maintaining sound business hygiene.

“No matter how sound the business process is, or how structured the organization is, business hygiene problems would set in.”

These are issues and situations that have potential to weaken the processes and reduce business performance.

Some common business hygiene issues experienced by SMEs owners are:

Mismanagement of business fund
Absenteeism
Unchecked movement out of office
Staff colluding with vendors to defraud the business through inflated invoices
Training gaps
Bad staff attitude
Pricing issues
Overtime issues
Commission issues
Diversion of sales by company representatives
Debt recovery issues
Poor production planning
Inventory theft and damaged goods
Delivery problems
Communication and customer issues
Increasing staff turnover
Quality problems and many other issues.

Some hygiene issues are peculiar to some businesses and industries.

One characteristic of a hygiene problem is that it creeps into the system stealthily and in a small and inconsequential magnitude. Oftentimes, when left unchecked it starts to gradually penetrate the system until it becomes pervasive.

Business owners should not allow poor business hygiene issues to set him. They must maintain daily checks of the entire system. They must not tolerate an iota of a hygiene problem. Where found, it should be decisively handled and a reoccurrence should be prevented.

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What Are Managers for?

We’ve talked about the need for processes and systems in an organization. So what the heck are managers for?

“The actual job of any manager should be to know and endorse a company’s system; to improve and to teach the system – and to ensure all employees are adhering to the system, so operations will continue to run smoothly.”

Managers are most effective when they manage the company’s system; which in turn, will manager the people.

So when you are recruiting a manager for your organization, you have to consider his/her ability to manage systems otherwise he/she will create a perpetual state of business emergency in your operation.

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Systems! Where Do I Start?

Systems, Systems, Systems!!! Where do I start? It is normal to be overwhelmed with the thought of creating a system.

“So the first thing you have to do is to determine if events in your business are predictable or unpredictable. If they are predictable you need a system.”

Identify the biggest problem your business is facing currently. Prioritize those areas of frustration.

Write down the process step-by-step as you think it will make the most sense. Think about the flow of the process and how each step effects the next step

Let your workers test the process and identify shortfalls, then review the process.

Document the process and assign a document number/revision date. This is your Operating Manual. File hard copies of each department’s operating manual.

As the business owner you should understand and give final approval if you engaged someone else in developing the system.

Remember: “Through wisdom a house is built and by understanding it is established” Old Proverb

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