Pointers for Emerging Contractors
Clean up your business and improve potential profit in 2017
Heinrich van der Vyver offers emerging contractors some sound business advice
As a business owner in South Africa for over 18 years, I know what it’s like to hit a brick wall. That ‘S-curve’ graph that tracks your business growth, starting at the initial growth spurt, then levelling out, and then the big slump where you’re not sure if you’re going to make it through, and then the surge of new business growth as you reach your next zenith of client-acquisition, mostly on the back of you getting to know who you really are as a business, what your brand is, and who your ideal client is. Yes, I know that S-curve well.
But once that surge has settled, and becomes the new norm, your growth seems to hit sludge. Your turnover is steady and good, your clients are happy, you’re replacing those clients who fall away with new ones, and you are covering costs. But the line on the graph doesn’t go up as steeply as you’d like it to any more.
It’s in times like these that your business – and probably your way of thinking about your business – could do with a vigorous spring clean. I don’t mean the ‘I changed the linen’ kind of spring clean. We’re talking pick up the rug, move the couches and strip the curtains type of spring clean. So put on your yellow gloves, because it’s about to get dirty.
4 ways to clean up your business and improve potential earnings in 2017
Think, think, think – and schedule Dream Time
I have two young children who love watching Winnie the Pooh. One of this yellow, fluffy sage’s sayings when faced with a challenge is, ‘Think, think, think’. Like the yellow bear with the red top, it’s time we slowed down to speed up. Take the time to step back from your business and think. Dream. As business owners we easily fall into the trap of believing that being busy means we are successful. On the contrary, we need to schedule dream-time where we can think our way into the next stage of growth.
In this context, ‘systems’ does not mean technology or bleeping lights or white lab coats. Quite simply, a system is where any two parts work together towards a common function or goal.
Your business has a lot of different systems that act independently or in conjunction with each other to produce or support your profit-making efforts.
Doing a systems check involves you, sitting with your managers and function owners, and mapping out what systems you have in your business. Remember, this is not just about computers and machinery. This is every system that has a set of elements that work together to produce a function or goal.
It could be the printing machine in the factory being manned by an operator. The machine, the human operator, his lunch break, the process and the material being used by the machine make up one system. It could be the secretary answering the phone and replying to customer emails. The phone, the tired/happy secretary, the computer and the slow/fast internet connection all make up that one system. And on you go, through your entire business until you have identified all the systems that make up your business.
The reason we do this is because the thought of improving a business as a whole is much too vague and too daunting, and so we usually just stop before we’ve even started. It is better to break up the business into systems that are in more bite-sized pieces, and then understand how we can improve each system, rather than look at the business as a whole. If we improve each system, even by just a little bit, our entire business will shift into another level of operations.
The next step is to map out your workflows. Basically, a workflow is the pathway your product or service takes from start to finish to be produced: from answering the first email enquiry, through to creating a quote to pushing it through production, including stock management and QC, to loading it in a van and delivering it to the client, finally culminating in an invoice and accounts.
1. Identify the workflow. What is the task or function? Perhaps construction site logistics and health and safety compliance.
2. Identify the processes involved in the workflow: such as construction staff on-site and getting the right building materials to them at the right time.
3. Identify the process owners. Who is the person responsible for each part of the workflow? Who is the expert in that role? If no-one is identified, have a discussion on who is best to handle that function.
4. Identify what steps are needed in each process. Sit with the process owner and unpack what takes place in that workflow. Take the brief, brainstorm with the team, put together a first draft, apply changes, send to client for comment and apply changes.
5. Identify how to do each step in the most efficient way. This is sometimes called a procedure document. The process owner will help with this and should include instructions on what questions to ask and how to record the brief on a template that is also attached.
6. Identify which of those steps can be automated. Repetitive admin tasks can often be automated by using business operating software. This frees up time and expensive resources can be redirected into more profit-supporting roles.
This process will streamline your workflow and make your business outcomes predictable, stable and measurable. In other words, you can confidently provide your customers with a consistent result, which ensures your customers keep coming back for more, and you remain profitable.
Once you have broken your business up into systems and mapped out your workflows, identify what limitations might be restricting the smooth and easy flow of work through that system.
A lid on your system could be an old machine that is slowing things down, staff that have a bad attitude, the lack of policies and procedures, or insufficient shifts to handle the demand on production.
This step could take a while.
You could think about taking your management team away on a workshop to brainstorm these points in a focused and deliberate fashion.
Alternatively, your ERP or business operating software will show you immediately, on a daily basis, in real time, where your constraints are across your entire business. ‘It can’t measure attitude,’ you might say. Well, it may not measure smiles per minute, but it does show you individual staff productivity, which should give you some indication of their attitude. At the very least it will raise a flag for you to address that you might not have otherwise noticed.
Once you’ve identified what the lid is in each system, you can brainstorm ideas to remove the lid and improve the system.
A good business coach can help you unpack these steps further, along with your ERP or business operating software. We never said it was going to be easy! But following these steps will improve efficiency across all channels, reduce wastage, and ultimately improve your bottom line. Here’s to spring cleaned businesses and better growth in 2017.
Heinrich van der Vyver is the founder of QuickEasy Software, a proudly South African software company in Cape Town with a national footprint. QuickEasy’s business operating system, or ERP, simplifies business processes and integrates every aspect of the business cycles into one, easy-to-use system. With a well-known legacy in the printing sector in South Africa, QuickEasy offers the same user-friendly, reliable business software to all businesses in South Africa, backed with friendly on-site support, business support and training.