The Money is in the Process

There is a common problem amongst technology business owners. That commonality is failure to answer a question about their business that typically starts out with, “What are the steps you use to do X?”

Sometimes it’s dependent on the subject, but often this question can’t be clearly answered. The subject could be sales, marketing, financial, service delivery, employee or even client related. Regardless of the question, there is a relatively high chance that silence will be the response when a business owner is asked specifically how these operational items are done.

Good or bad, there typically is an answer, but it just can’t be articulated. For example, if you managed to increase sales in a particular core service within your business to $500k and you are asked what your sales closing process is for that specific service, there is likely a documented answer (i.e. a process) available for that question. Think about it, there must be some steps the company consistently follows or they wouldn’t have $500k in revenue. That success goes way beyond luck.

With this said, the concept that the money is in the process has two positive meanings for your business.

First, when you build processes to accomplish your business goals and everyday tasks—whether major or minor in nature— it promotes the most efficient and organized use of your company’s resources. That translates into consistency, productivity and maximized profitability. There is no doubt about the results and it doesn’t matter if you are a one person shop or have 50 employees.

Processes give you the opportunity to move responsibilities from your plate to a sub or an employee. They also provide the backbone for you to train new hires of any discipline (i.e. admin, tech, sales, and management). You want your employees to do their best and feel important to the success of the business, but you shouldn’t let them hold you hostage because key processes are in their heads and not on paper. And when they move up in the ranks or leave your company for whatever reason, you need the next person in line with similar skill sets to be able to take over those duties without disrupting the business operations.

The second positive impact that processes have on your business is that they translate into greater business value. When an outside observer sees a well-oiled machine—organization that is consistent and repeatable through documented processes—it screams order and ease of transition. That translates into higher value and lower risk.

Put yourself in a buyer’s shoes to see what I mean. Let’s say you are looking to buy a company with approximately $500K in annual revenue that has been in the healthcare IT field for at least 3 years. If you narrow it down to two organizations with those two main criteria, would you rather pay top dollar for (and merge with):

Company A, whose executives can tell you exactly how they determine and price services, get leads, turn them into clients, service them efficiently, keep them as long term clients and profit from it all



Or



Company B which would have no business if their one salesperson/account manager that holds the keys to the sales process would leave, can’t show how they price services and whose margins vary widely from client to client (with a rather high client turnover rate).

My guess is Company B wouldn’t even get a second look.

In a nutshell, there is no reason for companies not to document processes where consistency is required and the task is performed on a regular basis. That’s a minimum condition, as you can make a process for any task. This applies to organizations from the super small to a bigger SMB technology business. There are truly no exceptions.

As technical people in a technical business, logic is natural. It should be easy to outline a process in logic diagram form and, where possible, turn it into some sort of written procedure, checklist and/or training tool.

By documenting it in logic flow and written form, it gives you the opportunity to see if there are any holes in your process. It also allows you to continuously revisit the method to change it as needed, or use it as a starting point for a comparable procedure—especially relating to sales and marketing. Once you invent a well-oiled machine, there is no need to completely reinvent it. It’s as simple as that. Now get out there and start documenting some processes to help you make more money!

 

George Sierchio is an internationally recognized advisor, speaker and author in the SMB IT channel. His company, Action Business Partners, Inc., has been educating and consulting business owners since 2003. Learn more at http://actionbusinesspartners.com