How to Build a Business
Setting up a business is not the easiest thing to do. In this article, I will share my views on how to build a business in terms of its systematization, that is, the division of the business process into several subsystems and their integration and organization. Building a business, setting up the business system and the business process, is not the easiest task for a complete novice entrepreneur, but that is what you should strive for. In this article, you will learn all the details regarding how to build a business.
What Business Processes Need to Be Set Up?
First, it is important to note that the business is a single entity, and dividing it into separate elements is done from a practical point of view. There are indeed different business processes with different intermediate tasks and goals, but very interdependent, and in the end still responsible for a single result – profit. Profit is the ultimate goal of any business, this is out of the question.
So, what business systems need to be established? Here are some of them:
- The system of organization of work in the business.
- The system of motivation and staff management.
- The system of communication in the enterprise.
- The system of communication with customers (existing and potential).
- The system of tracking competitors and the market.
- System of training, growth, and development.
- Systems are closely connected to the specifics of a particular business.
The list, of course, is not exhaustive. All of these processes are essentially part of some more global business processes that we are trying to establish. For example, staff training and communication in the organization is part of HR, tracking competitors and the market is part of marketing, the long process of filling out a 1099 misc form.
Therefore, it is very important to systematize your business down to the last link and to improve each of them. One weak link can reflect badly on the business as a whole. Just like, for example, if one part of a car fails, it won’t run. This is the interaction in the system. By replacing one part of the car, you’ve fixed the whole system – the car works. It can be the same way in business: systems are set up that way – many elements, one whole.
To build a business properly, friends, it is important to understand it as a system, to decompose it, and consider each individual business process as an opportunity to set up and improve the business as a whole.
How to build a business, systematize and improve it?
To help you systematize your business, I’ve made a little questionnaire that will give you a deeper understanding of all the business processes in your own business. Don’t think you need any special training or resources to do this. All you need is a head on your shoulders.
1. What is the ONLY thing you do in your business? How is your business and/or industry structured IMMEDIATELY?
For example, you have a store selling appliances. That is, you are in the business of selling appliances. What does this mean? It means that you have to buy these appliances (or maybe produce them, if you are a manufacturer), bring them to your store, attract potential customers, sell (!) to them, deliver the goods, provide service. Same in other words: find a supplier (provide channels of communication with them), organize logistics, marketing, organize sales, organize secondary logistics, service, and customer support. Plus, in parallel, control the work of employees, monitor market trends, the behavior of competitors, etc.
2. Which of the processes has the most significant impact on profits in my business?
This is more likely to be immediately clear. Because in any business the most important thing is marketing. Attracting new customers and retaining old ones. The essence of the question is more about what factor is in the second, third place, and so on. In general, it is necessary to understand the relationship of all these processes and to determine the priorities.
3. How can you improve the current priority business process?
You’ve ranked and you’re starting to think about how to improve your business process? Exactly the one that is a priority. Look for solutions, as many as you can. When you’ve been able to establish one business process, you’ve already started to establish the business as a whole. Next the next process and so on and so around. Even by the very fact that you have a better understanding of how your business works and how business processes interact with each other, you have already taken a huge step towards the competent organization of your business, no doubt about it.
A simple example: let’s say that you have competently set up the work with your customer base, and they come back to you again and again. You get more sales and more profits. But other business processes will also improve. For example, more profits, more marketing budget – better marketing. More sales mean more experience and thus skill in your salespeople. More loyal customers you have means more stable cooperation for vendors, too – you’ll have priority with them. And so on.
4. Has something improved? What exactly is it? How is it measured?
Of course, you have to monitor and measure the results of all these “improvements”. What if they’re not improvements for your business? In general, the most important thing is control and analysis. That’s the only way you can be sure you’re on the right track and can get your business up and running.
How to Build a Business System at its Core?
The items on this list are mandatory for any business. How to set up a business is not such an insurmountable question. All it takes is the creation of certain rules and schemes that will do the work in your business. Well, enterprise organization, if you prefer. Simply put, there has to be some kind of internal routine. That is, do not let everything on stream.
So, to summarize: The easiest way to set up a business is to systematize the individual business processes in your business and improve each of them. In other words, to establish a business is, first of all, to understand the interaction and influence on each other of different processes, and then competently and organize the rules of their execution so that it leads to improvement of all business.
It is probably possible to do things differently. Maybe big business manages to set up business right at the top, I don’t know. But for small and micro businesses, you have to start setting up business right at the bottom.
Victor Z Young is a Civil Engineer with 35 years of experience working alongside the executive team of various construction companies. Victor specializes in construction insurance, delay analysis, performance analysis and engineering. He holds a Doctor of Project Management from Northwestern University.