Do you ever wonder how to assess qualities of a good business? You need to look no further than to check their systems and processes.
These include lead generation, care of the customer, hiring practices, operations (order fulfillment), and other business specific systems.
Are the different business systems creating the intended results without creating chaos and frustration among employees, customers, and third-party suppliers?
Can we identify unique qualities derived from how the systems and processes are run?
Qualities of a Good Business
There are at least 7 qualities seen in a good business. These are the following:
Are Customer- centered
Each system is designed with the customer in mind and consistently helps to make your customers raving and loyal fans that serve as your billboard to referrals.
1. System is simple with documented steps
The system is as simple as possible. The procedural steps are documented, understood by workers, and repeatable are repeatable.
2. System has a single purpose
A system cannot achieve multiple objectives. It should have clear inputs at the start and clear output. Order fulfilment for example begins with the work requirements and ends with a product output.
The objective is to create a product or service that meets the stated requirements and specifications of the customer while complying with industry and company standards and regulations.
3. System has an owner
The system has an owner who has accountability and reporting functions to leadership. This helps eliminate the “finger pointing” exercise that occurs if something does go wrong.
A system without an owner is like a train with wobbly wheels heading for eventual derailment
4. Bottlenecks, inefficiencies, waste, and re-work are minimal – Qualities of a Good Business
The details of the system address previous and current bottlenecks, inefficiencies caused by waste and re-work to eliminate or reduce to a minimum most bottlenecks, inefficiencies, waste, and rework.
5. Performance metrics
The system has performance standards. Relevant metrics are measured for the purpose of continually improvement
6. Good communication in the business
There is a clear sense of company direction as communication is clear, timely and not only limited to passing orders, but also recognition of good employee performance.
The more frequently people get feedback, the better they perform
Tangible and Measurable Results – Good Business Characteristics
The obvious outcome of a business with these operational qualities is an increase in sales, lowered costs, and a higher profit margin.
The following are ways in which business systems provide a direct and measurable return on the investment of time, effort, and human and financial resources.
1. Effective marketing and sales systems generate more leads and a higher percentage of conversions.
Higher sales reduce the number of days required to reach the monthly break-even point, resulting in increased profit.
2. Efficient and smooth-running business systems enhance the customer experience and ultimately customer satisfaction and loyalty.
A satisfied customer is usually a happy and returning customer, and one who will likely refer your business to others.
3. Documented operational systems reduce employee mistakes, defects, wasted time, and rework.
They increase productivity and efficiency. A higher product or service quality therefore reduces material costs and labor.
4. High-quality products and services minimize customer returns
This results in less shipping, administrative paperwork, and recycling costs.
5. Efficient systems and processes shorten delivery/lead time
This causes your business to be the supplier of choice over the competition – certainly a good place to be!
6. Effective business systems accelerate the turnover of inventory and accounts receivable.
The result is lower stock levels, faster collections, and accelerated cash flow.
7. Well-designed and efficient systems and processes require less supervision and management oversight
As a result, fewer skilled resources are employed to do the work. Furthermore, having fewer employees and managers means lower administrative costs for the business.
Developing Systems and Processes
For many business owners, all this information seems fine and dandy but how to execute is typically the major problem as it is added work!
If you have a good team, the work can be done in-house if adequate human resources and time can be allocated to the initiative.
An alternative is to engage the services of a professional such as BCINC to help you navigate the initiative speedily and efficiently.
Contact us Now to see how we can bring improvements to your business HERE
Conclusion – What Makes a Good Business System
Now that you better understand how to assess the qualities of a good business and the tangible benefits, what are you going to do. Will it be “business as usual”?
Remember that “you pay for your good or poor systems one way or the other!!” Good systems pay for themselves.
Some system improvements can generate large financial returns, but most small improvement overhauls add incrementally to your profit margin – which is good for any business.
Related Articles
Benefits of Streamlining Processes – Know the Current State
The Process of Optimization. Benefits
References
IBM. Visualize Processes https://www.ibm.com/cloud/process-mapping
