Many small businesses, perhaps I should eliminate the word “small”, use an internal management system called “by the seat of my pants”. The most noticeable lack of systems is usually in the accounting area. It’s hard to understand why so many businesses still operate out of a check book and use a shoe box or desk drawer for receipts.
The most frequent excuse for a lack of systems is, “I don’t have the time.” I think that another reason is the lack of “excitement”, as systems are usually seen as a monotonous, unproductive chore.
Establishing and managing systems is one of the most important functions in a small business. If you don’t know where you are with your business, if you can’t provide an immediate financial snapshot, or if you haven’t tracked the results of your marketing efforts, or have a system for the delivery process of your products or services, you are in danger of becoming one of the 85% of businesses that fail in their first five years.
Technology has made the process of systematizing the three major functions (accounting, marketing, & internal operations) easy to learn and maintain. The following is a brief discussion on each of these three components.
Accounting: There are countless systems available for small business accounting. The one most of my clients use is QuickBooks. It’s inexpensive (around $200) and easy to learn and use. There are also small accounting services that will put all your accounting on QuickBooks, at an affordable rate. Outsourcing is the answer if you absolutely don’t want to take the time to do it yourself.
Marketing: Regardless of your marketing methods (hopefully you have a diversified marketing approach), it is critical to monitor the effectiveness of all marketing efforts. Spending dollars without knowing the results is not a good business model. Depending upon the size of a small business, there are many CRM packages available such as Sales Force and ZOHO. Yes, we have worked with some businesses for which we helped design a simple market tracking system specifically designed for their services/products.
Internal operations: This covers everything from how a phone is answered; how product/service information is obtained and maintained, the development of an office procedure manual, compliance issues and everything else in-between.
Once started, setting up systems in these three areas is not difficult or time consuming; it’s the ability to start the project and finish it that is difficult. Accomplishing this task is one of the first things that I or any other good business coach will help you accomplish. This step is necessary before the development of a strategic business or strategic marketing plan.
The growth structure of a business should be such that it can be presented for sale at any time.
Nick J. Petra CFP if you haven’t joined www.onebizcentral.com you are a procrastinator…