Managing small businesses requires processes to control quality of goods/services, finances, and sales to name a few. One can build these processes quickly. If you’re like me, you rarely get around to documenting them. Small business owners easily go from problem to problem creating mini-solutions as they deal with them. The challenge is that these solutions build on top of each other until there are hundreds of undocumented institutional knowledge processes that are critical to the business’ daily operation.
In one of our businesses, we have at 10 key processes we do each day:
- Quality calls
- Reminder calls
- Route closing
- Sales log
- Reputation management
- Advertising review
- Daily cash reconciliation
- Credit card processing
These are only the dailies; Monday is AR day, Tuesday is Sales follow-up day, Friday is vehicle maintenance. I’ve written elsewhere about month end reconciliation. The list goes on.
How does one know when a process isn’t working? This is one area I continually check with my managers. Colin Powell’s phrase applies: “Trust, but verify.” It relates to his eighth rule, “Check the small things.” Many of the processes I named are to ensure that everything is running correctly. My fear is that our business could be leaking leads, customers, or cash and we have no sight of the problem.
Let me share three examples:
Small Business Management: Check the Small Things
We run credit cards daily in the cleaning business. It’s a manual process of verifying that we rendered service but our system processes customer’s cards at the end of the process. The system tells what cards were accepted and which ones were declined (declined payments are yet another process). It’s always nice to see the amount we’ve earned.
Except the system doesn’t automatically process the cards as simply as it looks. It actually creates a file that another software application reads and sends out. We sometimes log into the second software program when we manually process a payment or to research a payment history. We’ve used the system for around six years and are pretty confident that everything works correctly. Until the other day.
For no reason other than curiosity one of the managers checked the second system after processing payments. She discovered that one customer’s payment had not been processed. In researching the card history, it looks like the customer has never paid for services. The way her card was set up in the first system prevented it from being transferred for processing. We bought the business in 2010 – the customer’s balance due is now around $3,000.00. The previous owner won’t enjoy hearing this story when I share it with him.
Small Business Management: IT Processes Can Make Big Errors
I quit direct mail campaigns in 2006. The acquisition cost was simply too high. Pay per click made much more sense in terms of measurement and efficiency. I developed expertise in managing AdWords campaigns. In 2010 I got tired of managing them and wanted to devote the time to SEO. I found a consultant to manage it for me. We fine tuned the campaign at a small budget until we were confident of the results. Then we raised the budget to about $4,000.00 per month. There was a feature in AdWords that I wanted to test. I asked the consultant to set it up. He did. The campaign ran away from us faster than we imagined. I went through $10,000.00 in three weeks. There were some more leads, but not enough to offset the cost. I was using a credit card with a lower limit to control just this sort of event. When I asked why they allowed me to exceed the limit, they said it was because I was a VIP customer! Thanks but no thanks in this case.
Small Business Management: Where are the Leads?
My business websites are one of the largest sources of leads for each business. Different providers built and host them. All require different levels of administration. In my property management company, I spent a lot of the early days working on search engine optimization. I hired an intern to do all the directory entries, start blogging, and to work on developing back links. I did the website configuration for the lead generation form and rental listings. I knew that I had to wait a little time for leads to start, but none came in.
I tinkered with the site for another 30-45 days. There was some lead flow from phone calls and networking, but the site wasn’t generating traffic. I finally called the site provider. They quickly pointed me to where I could see the results of the form fill – there were 30 leads from the previous two months! The leads were coming in, but I hadn’t configured the notification correctly.
Where are the holes in your small business processes? Let me know!