Tips for a Small Business When Setting up its Operations

In a small business, the reliable delivery of a product or service is critical for establishing a loyal customer base. However, many businesses have humble beginnings, a solo entrepreneur working in their kitchen or basement.

As such, the founder being a one-person operation has a hard time envisioning what a full business operation should look like to respond to rising customer demands.

Here are some fundamental tips for taking a small business from the very beginning to become a multiple-employee operation:

Business Processes are Key to Scaling a Business Operation

First, the small business owner should evaluate current business processes, identifying all critical steps taken to produce and deliver the company’s products or services. This begins once an order is received and ends when delivery is made to the customer.

By breaking down product or service production and delivery into discrete steps, the owner can spot where issues occur in its business operations.?

Work flow diagrams ?are a good tool for laying out the steps of an operational process, enabling them to be evaluated for productivity and operating efficiency.?The overriding concern is that operational issues will impact customer satisfaction.

Next, identify the needs of your target customers as clearly as possible. Then establish a way to learn if the delivered product or service has met each customer’s expectations.

A survey or follow-up phone call or email can be used. This is a great way to find issues that help refine the production process to achieve customer satisfaction. In addition, areas for product or service expansion may also be uncovered, further meeting customers’ needs that also helps to grow customer loyalty.

Now having defined the steps for creating and delivering one’s product or service, another core tip is to explore where in the operational process someone, other than the owner, can be added. This is often a major first step in achieving a multiple-employee operation.

This entry point for another worker is usually where the work is repetitive, making it easier to add someone who is lower-skilled and lower-paid. When this approach is applied throughout the business to everyday tasks, the owner is smartly using efficient time management.

However, there may also be a place where something highly specialized is required. An example is someone who has a good eye for detail. Their skill can be applied to product quality checks before shipping. Use of this specialized customer service skill leads to fewer customer complaints and fewer costly returns—covering the cost of the addition of another person to the operation.

Scaling Operations More Quickly

In cases where the company is experiencing rapid growth, the founder may not have the experience to readily deal with the demands placed on the startup’s operations. Some options can be taken.

One route is to hire a small business consultant with the right expertise — a justified step when orders are rising and the cost of operational setbacks is high. An alternative is to expand business management by hiring a business operations manager. During this stage, more business resources may be needed such as funding to bolster cash flow necessary for business growth.

As the business operation becomes more complex, the owner needs to connect the increase in business operating expenses with the company’s financials, specifically the profit and loss statement. These steps are needed to keep control of the operation and know how profitable the business can be.

More formal financial planning is also required because of the growing requirements of hiring more people and growing overhead costs. This is part of formulating a growth strategy that entails matching changes in operations with sales growth. When doing this the owner makes better informed decisions about the business.

The Important Role of Technology in Small Business

Utilizing technology to build the operations of a small business is now critical. First, the owner needs to keep up with their competitors who also use technology to expand their business and increase their market share. Technology now offers small businesses a great advantage that did not exist in the past as new applications are being introduced regularly to serve small to midsize businesses.

Whether starting up a business or overseeing an established small business, owners now access to a range of technologies that are relatively inexpensive to bring into a business. They range from online bookkeeping services, email services, social media, Generative AI and more. Don’t delay in creating a check list of technologies that directly contribute to efficient time management.

The People Part of Business Operations

We now move to the people part of small business operations and the first steps of?building a culture of success . Having a focus on the very start of business operations, business practices come to the forefront, specifically business decisions on how to hire well and how to improve employee management.

Having a good understanding of your business and the industry helps in the human resources component of building a great operation. Knowing what makes a good worker from prior work experience reduces personnel setbacks. Keep in mind that hiring the wrong employee has a double cost, paying for their poor performance and repeating the costs of hiring and training a replacement.

Just like operations which is process driven, setting up a tight recruitment and interview process increases the likelihood of the candidate being a good match for the company.

Certain employment agreements preclude one from hiring co-workers away from a prior employer, but that is not always the case. Check with an attorney to avoid legal trouble. Hiring someone well-trained within the same industry boosts an emerging operation. This is particularly true if they are a first employee.

An important skill applied in all parts of a business is the delegation of work. This is part of an owner becoming a skilled business manager. To do this, one must have the management skill of balancing employee oversight with giving subordinates more independence in a small business .

Business Operations Management?

Once the key components of the business operation are in place, set some business goals and business objectives as part of the company’s strategic planning. Goals can range from setting deadlines for certain efficiencies to be in place or possibly setting production targets to be achieved over a defined period to support sales growth.

At first, goals being set may not be achieved. However, learning to set goals through experience helps familiarize the owner with operational planning—a more sophisticated approach to running a business operation. Also, an operational mindset will emerge whereby the owner more readily commits to adding the necessary elements for efficient operations to scale a business.

Operations Planning

Within a business model’s comprehensive business plan is the operating plan for the company. The latter focuses on the steps the company expects to take in the coming year to support delivery of products and services.?This typically includes personnel hiring, making capital expenditures on equipment and technology, and increasing overhead.

Summary

A successful business needs satisfied customers to grow and become a larger business, offering more services to even more customers. A startup’s earliest customers often provide testimonials that lead to higher revenues and sustainable growth. That is why a small business needs effective operations management which provides exceptional customer experiences that can be touted to potential customers.

This overview offers tips for setting up small business operations. While the goal is for operational efficiency and cost savings, great customer service leads to strong customer relationships that makes a business successful.

Jeanne is the Founder and Publisher of?American Entrepreneurship Today, a web site dedicated to helping entrepreneurs and small business owners to succeed. She also hosts the podcast series?Experienced Voices , a platform for interviewing highly successful people open to sharing what was key to their success.

She is the founder of?AEP LLC ., where as a growth strategist she steers entrepreneurs and small businesses past the challenges and pitfalls of starting and growing their businesses. She previously built a display business in the cosmetics industry and a nationwide tech services company.