How Productive and Effective Operations Can Help You Grow Your Business

Summary

Every business needs safe and lean processes in order to survive in today’s highly competitive environments. This article takes you through some of the things you should be considering if you want to remain competitive.

Lean manufacturing has a concept of “value added”. This is used to describe processes that move a customer’s order forward. Waiting for something to happen is called “non-value added” or waste and needs to be eliminated. A lot of people concentrate on reducing the costs of doing the value added operations. However, if you analyse a process whether you are a service or product based company you will find only 25% of the time is spent actually adding value, the rest of the time is waste. Working on eliminating waste will have a far greater impact on improving customer service, costs and ultimately your profits.

The best organisations flow chart their processes and are then able to see where processes are broken, involve waiting and double handling. The quality standard ISO9000 allows for flow charted processes and this can be invaluable in helping to not only ensure that processes are adhered to but are also as efficient as they can be.

ISO9000 also means that your processes are reviewed and accredited by external experts in process management. This can be a very useful in helping to identify flaws or gaps in your processes.

As the cost of waste and utilities such as gas and electricity continues to rise then ensuring the business is environmentally aware is essential in order to stay competitive.

In addition to the quality standard, there are management systems standards for health and safety (ISO 18001) and the environment (14001). These can be combined with ISO9000 to become one management system for your business. For high growth businesses that have grown into larger businesses then a combined management system is essential in keeping the business safe, legal and environmentally sound. The savings made through reductions in injuries, claims and waste more than pay for the system to manage them.

Health & Safety

High growth businesses are safe places to work. They take health and safety seriously because it pays to do so.

Depending on your industry or business sector, there are a myriad of regulations relating to health and safety with many workers having to complete mandatory training before they can operate machinery such as fork lift trucks or even something as simple as a ladder.

In the past somebody in the company would be assigned the role of health and safety on top of their full time role in the business. You do need somebody to have that role but a cost-effective solution is to use one of the many third party providers who will act as your Health and Safety Competent Person. They can audit your operations and advise you on the actions needed to make your work place safe and compliant with current regulations. The internal person must have sufficient authority to ensure that the actions are then carried out.

ISO 18000 certification (or OHSAS 18001) covers Occupational Health and Safety Management Systems and is a means for embedding health and safety awareness into a business.

Lean Processes

Lean thinking is about looking at the business using a range of simple to use tools that help you become more effective and more efficient.

There is a phrase that sums up lean thinking and that is, “a place for everything and everything in its place”. This means that:

  • You only keep what you need to do the job. This means getting rid of through selling or disposing of anything that you don’t need to do the job in hand. If you haven’t used anything for 6 months then you are unlikely to need it. Storage costs money because it takes time to store it, the space you use could be used for productive work and you spend valuable time looking for things.
  • Keep those things that you need to do your job close to hand. Make it easy to find whatever you use whether it is a tool or a stapler. Clean out your desk if you are office based or create a shadow board for the tools you use. Make sure there is a place for everything that you need.
  • Keep your workstation clean. If you have removed all the clutter from your workstation (this applies to both the shop floor and the office) then it is a lot easier to keep it clean.
  • Create standards for your workspace. Take a photo of it and place it in a prominent place. Do this for shared areas such as kitchens, photocopiers and machine tools. This means everybody is reminded of what the work area or office should look like.
  • Sustain what you do. Create an end of day tidying and cleaning routine that means when you return to work the next day it is as fresh and clean as you are.

There are a large number of books on lean thinking and the principles can be applied to more or less to any work environment whether in manufacturing, distribution, construction, retail, office environments and education.

Documented in Flow Charts

Every scalable business is based on a series of processes, procedures and working instructions. Many organisations especially franchise businesses have written documentation which explains in detail what has to be done and when.

Written documentation in the form of manuals and ISO procedures are fine however they don’t make it very easy to see the flow of the business and where the opportunities for improvement are.

It is now good practice to flow chart your procedures in the management system. This gives you the opportunity to work through every process in your business and work with your team to remove duplicated effort, inefficient processing and time spent waiting for something to happen.

Flow charts make it easy for your team to see the whole process. Usually a process can captured on to one page which makes it easy to see what is being achieved.

The process of flow charting can be a powerful team building activity as it allows everybody to contribute and identify improvements to the process. The tools are simple, just take a flip chart and start at the beginning of the process and then keep asking, “what happens next?”. Make sure you look at each decision and write down all the possible outcomes. Once you have captured the flow chart on the flip chart use one of the readily available flow charting software packages to store it electronically. They can be presented in PDF format and saved on an Intranet for easy access by others in the team.

Flow chart every process in your business and make sure each time you do a process you take the opportunity with the team to make it more effective and more efficient.

Implement any changes that you have agreed and ask your team to review the amended flow chart.

After a few iterations you should start to see the benefits in the way you do things in your business.

ISO Standards

The ISO 9000 quality standard is a key accreditation for a lot of businesses and many larger businesses will not work or can’t work with a supplier who hasn’t accredited to ISO 9000.

Once you have flow charted your processes then accreditation to ISO 9000 is relatively easy as the hard work has been done.

One of the key benefits of ISO 9000 is that you regularly audit what you do to ensure that are doing what you are saying that you do. If there are regular non-conformances then you need to review your processes to determine why as not keeping to the process may mean that the documented process is wrong or there is a fundamental problem with the process.

Environmentally Sound

With the world’s resources becoming scarce and so it is socially responsible to ensure that you make best use of the energy, water and materials that you use.

As political pressure to protect the environment and the cost of disposal continues to rise through increased waste taxes then it is also commercially important to be environmentally aware.

The first stage in the process is to get a third party to undertake an environmental audit. An experienced third party will be able to spot opportunities for improvement and often cost-savings far easier than an internal person.

The actions from the environmental audit should then be fed back into the continuous improvement plans for the business.

The standard ISO 14000 if incorporated into your management systems can be a long term method of embedding an environmental consciousness into the business.

Continuous Improvement

As the only constant in business these days is change then it makes sense to have a process for continuous improvement to ensure that what the business does is in line with what is required of it by its key stakeholders.

The size of your business will dictate what processes you need to put in place in order to ensure that you do regularly review your business. Some ideas for maintaining continuous improvement include:

  • A cross functional team with board level representation meet to develop and progress an overall action plan for improvements in a business.
  • External auditors (quality, health & safety, environment), business coaches and non-executive directors are used to help the company identify areas for improvement.
  • Taking part in business awards which forces you to identify all the things you are doing well.
  • Competitor reviews. Look at your competition and ask what are they doing better than you? Is there anything you can learn?
  • Ensure the concerns of all your stakeholders (customers, employees, suppliers, shareholders) can be heard through all levels of the business.

Create an action plan for improving your business championed by a board level director and that it is given a priority that ensures that over time the improvements are embedded in to the business.

5 Tips to Create Overnight Success With Your Home Business

There are a lot of runners in a race, but how many get the prize? Two or three at the very most! The others finish in the also-ran category. Similarly, in business there is lots of competition everywhere. Only a few develop into a big and successful business. But the consolation here is that, the also-ran, also earns enough money.

Home based business is a new breed that is making every head turn and cash registers ring. If you are into it, then you already know the knack. But what if, only with a little more effort, your home based business achieves overnight success? Here are some tips.

Offer unique product / service

If you do not wish to end up as an also-ran, then you should not run the common race. Run in the direction that takes you to prizes that know one else knows about. Take the path know one else dares to tread. This is the first key to success. Develop your business over an idea that is unique in nature or offer services that know one has thought about or develop a solution to some problem that many people face. The uniqueness of your products and services will put you on the fast track that know one else is running on. It allows you to grab the prize before anyone else catches up. But then, being unique is no walk in the park. Look around for possible clues. Think about capitalizing on your very own talent or simply, follow your passion.

Focus on the target

Are you allowed to change your track while racing? Never! So do not change your track in business as well. Do not wander. You should always maintain your track with a specific target in mind. Concentrate your energy over the same pursuit. This will allow you to achieve expertise in your chosen business. Chart your step by step course towards, a bigger and better business. On the way, stay focused. Utilize available resources to the maximum. Seek guidance from the experts, or online. Sharpen the skills that will help you along the way.

Staying focused on your goal will give you some clues that may prove to be beneficial for your success. This will open up hitherto unexplored tracks to success.

Promote your biz

You should get talking about your business. Utilize every possible medium to make its presence felt. Put banners at eye-catching places. They don’t need to be very big or hording. Places like community centers, bus stops, parking slots, etc… are equally effective. Distribute pamphlets at social functions or at traffic junctions. You should publish relatively small ads in newspapers. Also do not miss out on electronic media such as local TV networks etc…

Most importantly, get blogging about your business. Post blogs on popular websites and offer your business as a solution to someone’s problem. Blogging is a new rage and many businesses are utilizing it to the max to promote their business. Learn the basics of blogging. It doesn’t require technical expertise or many creative skills. You can do this relatively easy for the sake of promoting your own business.

Build a team and relationships

Every successful business needs a team to support its activities. Build up your team. Your team should, possibly, have an expert from each sphere of business activity. It should have speedy distribution channels. Your team should also give excellent after the sale support. If you are the sole owner and operator of your business, you should build up your contact base. Expand your business relations and ensure that being alone does not turn out to be an excuse for inferior services.

Remember success is nothing but putting valuable points into practice. You have these points, putting them on the right track will ensure the success of your home business.

Simple Accounting For The Small Business – Bookkeeping Using A Simple Spreadsheet Template

Starting a small business out of your home, offering products or services like business consulting, photography, selling on the web or a MLM? You are now faced with tracking all your expenses and revenues for your business and you certainly don’t have the money yet to engage a bookkeeper or accountant. If your business is a sole proprietorship, whether it be a Canadian Proprietorship or a US-based Proprietorship, you do not require an accountant to submit your company financials (books) to the IRS (USA) or Revenue Canada). Your business revenue and losses are reported as part of your annual personal income tax. For this small business start-up, you won’t need to buy fancy accounting software, like Quick Books or AccPac to track your business.

Only as part of incorporating Bizfare Enterprise Inc in 2005 was it a requirement to engage an accountant. My accountant did insist on using Quick Books software for my business accounting. Up until then using a simple spreadsheet template served my business accounting needs for over ten years. This simple spreadsheet accounting stood the test of multiple audits by Revenue Canada (CRA and Revenue Canada Goods and Services Tax. Both the hardcopy columnar pad and an electronic spreadsheet version of my financial books were accepted by Revenue Canada. (BTW the audits disclosed more ways for me to claim back additional taxes for the previous three years! Now that’s my type of audit!)

In your new start-up business venture, you likely will generate somewhere between 10 to 30 accounting transactions per month. These transactions would be items like Expense, Revenue (sales), Liability (Loan) type transactions and Sales Tax (Federal + State/Provincial) Collection/Deductions. These transactions are further broken down into various Business Accounts. All the Accounts you set up for your business is called a Chart of Accounts. Recording your business financial transactions (Journal Entries) can be executed with pen and ink on an accounting columnar pad or electronically with your computer using a spreadsheet program (MS Excel, Open Office, Star Office).

Whether you employ electronic or hardcopy media, you need to develop a simple Journal template to create your Business Synoptic Journal. This Synoptic Journal format has the advantage of allowing you a complete view of all your individual journal entry transactions against all your various Business Accounts. Creating this Synoptic Journal is easier to do than you think and requires no prior accounting or bookkeeping knowledge.

TIP #1: You could further reduce the accounting line items (Journal Entries) by consolidating like items such as ‘all the Sales for the month’ and ‘all parking receipts for the month’ into one totaled line item for the month.

Where do you start to identify the various Business Accounts required for your Synoptic Journal?

If you currently work for a company or government, secure of one of their employee expense forms. Look at each of the areas identified as expenses – meals, mileage, hotel accommodations, taxi, car rental, telephone & cell phone, air fare, office supplies, etc. This is an excellent place to identify the various Business Expense Accounts you need to set up for your business accounting books. To complete your business Chart of Accounts, include a Business Bank Account, Sales, COGS (Cost of Goods Sold), Sales Tax Collection, Marketing Expense and others as required. Each of these Accounts will be a listed as a title across the top of each column of your Synoptic Journal. Each row (line item) will be the individual journal transactions entered by you. The journal transactions are grouped and summarized for each business month; usually, January through December.

So your Synoptic Journal would look something like this Sample Synoptic Journal at http://picasaweb.google.com/carl.chesal/BookkeepingTemplate.

The column headings might be in this order (from left to right):

DATE | DESCRIPTION | BANK DEPOSITS | BANK WITHDRAWALS | SALES REVENUE | COGS | SALES TAX COLLECTED & REMITTED | OFFICE SUPPLIES EXPENSE | EXPENSE #2 | EXPENSE #3 | ETC

TIP #2: Unless your business is Incorporated or an LLC, you don’t need to go through the expense of opening a business account with your bank. Usually Business accounts charge a higher monthly fee, charge for printing checks (cheques) and don’t offer any interest on your monthly account balance. Instead, open a separate personal bank account (maybe savings). This will show the ‘taxman’ that you are keeping the business separate from your personal banking. Remember you are a sole proprietor and all your business income (and losses) are to be applied directly to your personal income tax submission ( a s per IRS and CRA).

To save you time and make is very simple, I have already created a simple spreadsheet Synoptic Journal template that performs all the calculations for each month and rolls up the 12 business months so it can easily be included in your annual personal income tax preparation. This Synoptic Journal template has Debit/Credit checks and balances, tracks sales taxes, mileage and totals each account for your entire fiscal year. If you want this FREE Bookkeeping template, you can get it at Communicate Innovate. With a few key strokes, which will help identify yourself, I will gladly send you this FREE Synoptic Journal Template and also any future Small Business Tips.

TIP #3: One Rule of Accounting is that every time you record a journal entry (line item which applies the transaction against the appropriate business accounts) the Debits and Credits MUST REMAIN EQUAL at ALL Times. This Debit Equals Credit calculator is built into this FREE Bookkeeping Template. When you have completed entering a line item (journal transaction), check to ensure that the amount the the Debit cell equals the amount in the Credit cell. If they are not equal, you have not entered the amounts properly in your journal transaction. Correct the problem before entering your next journal entry.

You are now equipped to capture your business financial books with some simple accounting software. Happy bookkeeping! And Happy Selling!