How you’re doing business is costing you money–no matter how profitable your company appears to be.
You may have a sales pipeline that’s more of a sales water main. Perhaps your competitors are side-eyeing you at tradeshows, trying to ferret out the source of your brilliant marketing. Maybe your accounting books are a veritable sea of black ink flowing toward record-breaking profits.
It doesn’t matter. You’re still losing money because of the way you do business. Unfortunately, you won’t find the root cause of the cash you’re hemorrhaging in your KPIs.
The culprit has a name: process. Your processes can stretch limited resources, streamline for greater efficiency, instill accountability, protect you legally, and help you define true opportunity versus useless—but shiny—pennies. Or, do the opposite.
In short, process is the engine that powers your business. Whether you realize it or not, it already exists throughout every facet of your company today. (Yes, “we do it different every time” is a process; it’s just a bad one.)
So what are some signs that it’s time to take a closer look under the hood?
It’s the Wild West in deal flow // Not having set processes for every step and decision in deal flow not only slows you down, it can bring lawyers knocking at your door.
Lawyers first // The Fair Housing Act applies to private lending too. Even if you don’t think you discriminate, if you can’t show how you arrive at decisions and that you’re treating all potential borrowers equally, you’re begging for the kind of legal trouble that results in law-school case studies. Defining your policies puts your actions and inactions under a microscope before the public does.
Beyond that, process creates repetition and rhythm, which leads to speed. That speediness lets you make the kinds of promises that bring in more leads and prevent you from losing out to other lenders. (How would you like to market “Decisions in a day, money to you in two?” Streamlining your processes can get you there.)
Someone takes a vacation—and it all goes to hell // That’s your best-case scenario, because that person eventually comes back. A more permanent absence can stall you for months or years if you don’t know exactly what a key employee did or how they did it.
That lack of understanding can also lead you to fire an employee on bad intel or keep someone on when they aren’t preforming. Knowing the processes your employees follow to fulfill their roles means you know their worth to your company, can hold them accountable and keep crucial tasks moving in their absence. Having a grasp on all processes also means you’ll have a better understanding of what you need in a potential hire.
You’re perpetually hustling, but it feels like a hamster wheel // Process will show you the source of a problem. It could be that most of your time goes to administrative tasks when your focus should be on sales. It may be time to automate, hire or outsource the work. Perhaps you’re closing a higher percentage of deals, but there are fewer deals in your pipeline because you’re spending less time prospecting and more time working with each client. You need a way to streamline or hand off your customer service, or remove something else from your plate.
When you know the steps and factors contributing to a result, you can then measure and hold yourself accountable to complete the actions to reach it—or realize that you can’t physically do it all and that you need to cut or optimize.
So how do you improve how you do business and recognize where you’re losing out?
You define what it is you’re already doing.
STEP 1 – WRITE IT DOWN.
No frills, no fuss. Bullet a list for how to get from Point A to Point B, exactly as you do it today. In finance, it doesn’t exist unless it’s in writing. This is no different.
- List key processes for all core functions (sales, marketing, operations, admin, HR, etc.).
- Set a timer for 30 minutes. Write down the cornerstone tasks first, filling in the more granular details only if you have time. At 30 minutes, move on to the next key process.
- Include who does the task and how long it takes.
- Identify your Black Box processes: anything that gets done, but you don’t know how or who does it. Don’t touch it for now, just note it and move on.
- Remember that this isn’t First Date You, this is Sweatpants You: Write it out how it really is.
STEP 2 – RID YOURSELF OF BLACK BOXES.
- Find the process owner and have them take no more than 30 minutes bulleting how they accomplish the process using the same guidelines as you did in Step 1.
- Clarify any items you don’t understand. Don’t touch on whether it’s “right” or “the best way to do it”—just make sure you get it.
- Note any items that still magically reach a conclusion but don’t have a defined way to get there. These are your “We do it different every time” processes.
STEP 3 – ON A SCALE OF “FORGETTABLE” TO “BUSINESS KILLER,” ASSIGN VALUE TO EACH TASK.
- A scale of 1 to 5 works best.
- Don’t stew—go with your gut and go quickly.
STEP 4 – PRIORITIZE, BRAINSTORM AND SOLVE.
Congrats! You now have your business on paper as it exists today.
- Don’t shove the file in a mental (or physical) drawer. It’s your business. Keep it out.
- Start working on it however you want: your Business Killer 5s, the one that itches at you most, the one your spouse is tired of you complaining about, your “We do it different every time” Black Boxes.
- You will not take Rome in a day. Spread it out on a schedule you can realistically manage.
- Involve employees across lanes and experience level wherever possible. When you meet, the purpose is “Find a better way to do X. Go.” If you don’t have employees, make friends.
- Only change what you will follow through on.
The important thing is to start working on your business processes. It may seem messy, but no more than just allowing the processes to take on a life of their own. ∞