Constancy and precision, their importance cannot be underestimated within a business. So many times we overlook this simple necessity in our businesses in exchange for a short term payoff of rest or profits. Maybe you have to take the annual family vacation and cannot tend to your business or your dealing with more pressing issues. Sometimes problems with the quality of our product or service come from trying to service more than our capacity.
So then our question becomes, how do we keep consistency and precision when it is not us actually completing the work. Regardless of whether this work is your core product/service or if it is back office support functions, it requires consistency and precision. Even if your pressed by additional requirements from customers or employees or both, you still must carry on the same business functions. The solution is systems.
I’m not taking about computer systems, although they are included in this much broader term. What I’m referring to is a repeatable, documented processes including step by step procedures for whatever task need to be accomplished. Your teaching the man to fish instead of handing him a fish. This can be a tremendous amount of work upfront, but you can consider it a “time annuity”.
In finance, an annuity is a sum of money which is paid upfront in exchange for small payments plus interest over time. In this case, you may be dedicating a total of 160 man hours this year in setting processes and procedures, but it may free up half your year when you hire a part time employee to execute these procedures. The benefit is that you can now focus on other aspects of the business. You can stay strategic instead of getting caught up in tactical maneuvers.
An example that we use at our accounting firm may be the flow of payroll. We have two procedures, one for paper submission from our client, and one for digital submission. When the client submits their payroll, it sets off a schedule of synchronized and documented events which ends with our client’s payroll being paid to their employees, and Uncle Sam getting his part. Regardless of who completes these tasks it is done the same way every time. That is how we achieve consistency and accuracy in tax returns (every client gets a checklist), system implementations (regardless of software there is still a procedure), and even our virtual CFO services (same consistency monthly, quarterly, and annual activities).
If your a restaurant your procedures may include cooking instructions, greeting instructions, and serving instructions. If your a construction contractor then your instructions may include bidding and assigning new work. Whatever the business, when you add this strategy to your business “how to” handbook you will find many more opportunity to grow the business and live the life you set out to achieve. I hope you can apply this concept to your business.
James H. Johnson, CPA. MBA