Every business at its core, runs on some sort of an operating ‘system’. Once a customer places an order, the business ‘system’ proceeds to make the product or produce the services, deliver this to the the customer and satisfy them enough for them to pay for it.
Within this operating system, is usually a set of steps or procedures, that employees follow in order to maintain some level of consistency and standardisation in delivery of the product.
This all makes sense.
But what doesn’t make sense is how often, seemingly simple actions turn into repeatable mistakes, that lead to frustration, pain and dissatisfied customers. This results in stress on the business owner, inefficiency, and eroding profits.
Recently, I had a conversation with a business owner that runs a successful cabinet making business. He has a handful of clients, does work all over Australia and is usually flat out.
During a call one week, he expressed his pain in having to double handle what was happening in his factory and how the onsite teams were constantly calling back to the factory for various reasons.
I listened to what my client had said, and then I asked him…
Do you have checklists for what the team do in the factory?
His response… “Well, sort of?”
Im sure you can agree, this scenario is common among busy businesses and might even happen to you on occasion.
I explained that what we should do, was break down his cabinetmaking process into steps and then safeguard it by creating a checklist that was completed at every step.
This is what it looked like…
At every step, we then created a simple checklist, that highlighted what important tasks and responsibilities were required for that step.
As you can see, we also assigned an employee to monitor the checklist at each step. It was their role to “tick” the list off, before handing it to the next person.
Heres a snapshot of one of the checklists:
The Results…
We rolled this out to the team, and waited for the results…
Within two weeks, my client noticed a significant reduction in error rates, each step was being completed successfully, there were no more onsite installation headaches and the team stepped up and took responsibility.
I checked in to see how things were going. My client expressed his happiness to me:
“Chris, the difference between a fortnight ago and now, is like night and day. All the pesky phone calls and little problems I had to deal with have disappeared. Its such an improvement!”
Now his ‘system’ is running smoother than ever before and he can focus on more important things.
What Checklists can do for you…
I see this scenario time and time again. A system that is sort of “clunky” and is void of responsibility. It relies too heavily on an individual and not heavily enough on the system to produce the result.
When it comes to preparing a business to sell, you need a robust system that delivers consistent products and results, that is repeatable and can be performed by anyone (skill dependant).
The easiest way to guarantee this is by creating and implementing checklists into your operating system.
A checklist will provide you and your business:
- Consistency
- Standardisation
- Autonomy
- Repeatability
- Happy customers
- Less stress
- Versatility – knowing that anyone can follow it
- Certainty – for an investor looking to identify any risk in your ability to serve your customers, now & in the future.
The BEST part about a checklist, is that they are simple, fast to produce and implement and act as a guide for others to follow.
In his book “The Checklist Manifesto: How to Get Things Right”, by
Dr. Atul Gawande, he states that checklists help prevent common mistakes with serious consequences. They are designed to be short, clear, and focused on the essentials. As Gawande puts it, “Good checklists are, above all, practical”.
Your next move…
If you’re thinking of selling your business in the future, or have started the preparation to do so, getting your checklists right, are a fantastic move to lifting the saleability and value of your business.
And above all else, they’ll even make your life easier in the process!
Does the above seem overwhelming?… It shouldn’t be.
The best time to start planning your Exit is NOW!
If you need help with Exit Planning advice, or have a question about the exit process, simply hit the ‘Got a Question” button below.
Ok, in my next email, I’d like to share the top 5 things you need to think about BEFORE you speak to a business broker.
Until then,
