You probably know of a number of businesses that collapsed as soon as the owner was unable to work every day. A sustainable business should be able to survive beyond the owner’s working life. If you are a serious high-performance entrepreneur, you most likely want to build a long-lasting business that creates real value and wealth. You need to take your business from being a one-man outfit to becoming a valuable business entity. That is the next level in entrepreneurship. Here are a few basic steps you need to take to build a business that lasts.
HAVE A BUSINESS OPERATIONAL SYSTEM
A sustainable and growing business needs a system for managing and controlling its key operations. This is basically a set of procedures and steps that guides your people in delivering your services and products. A one-man business relies on the owner to guide operations. When the owner is not available nothing happens in the firm. To take your business to the next level, you need to set-up and document all the procedures and steps that need to be followed to carry out daily operations.
This could include how to look for customers, find out their needs and fulfill them. In a number of SMEs that I have worked with, the owner does the whole nine-yards: he takes customer calls, collects orders, does or closely monitors the work and handles the delivery. Now, what happens if the owner is not available?
An operational system describes all the processes involved in delivering the goods and services so that employees can perform the work without the owner’s direct involvement. Duties and responsibilities are assigned so that employees can do the work, even if the owner is not there. The operational system needs to be documented so that everyone knows his role in the whole business process. When there are changes in staff, the replacements know what to do.
SET-UP A FINANCIAL PERFORMANCE AND REPORTING SYSTEM
Many business owners are skilled in a few key areas which are fundamental to their businesses but are often not necessarily financial experts. However, finance is very important to a business’ survival and growth because money is the lifeblood of every enterprise. Many SMEs fail as a result of poor financial management and bad money decisions. It was recently reported in the press that there is a default rate of over 34% on loans advanced to businesses in the past year. A banker who works with SMEs said the rate was actually much higher and the cause was mainly financial indiscipline among business owners. Such indiscipline stems from having a poor appreciation of the effects of one’s financial decisions.
Successful companies have in place proper systems for the management of their finances. Without a financial management system, tracking the movement of a business’ money is almost impossible. Some business owners even manage business funds from their pockets. Record-keeping and accounting are seen as unnecessary burdens. The result is that one never knows how much money the business is making or losing and its actual value is distorted by the mixing of company and personal funds and expenses.
To take your business to the next level, you need to set up a financial system that captures and controls all financial transactions in a company. Take the time and seek advice and help to put these three systems in place and you position your business for take-off to the next level ofgrowth.
The Zimbabwe Agricultural Competitiveness Programme, with the support of USAID, recently launched a series of training programmes designed to provide business skills to improve the competitiveness of SMEs in the agro-industry value chain. This includes all entrepreneurs who provide products and services to agriculture.
If you want to know more about these programmes, please visit my blog http://chichonip.wordpress.com or send me an email.