- February 7, 2022
- Posted by: Manuels Effe
- Categories: Competitive research, Insight
Business structuring works in all kinds of businesses, including small ones. It remains a most important step to take when it comes to business growth, expansion, and sustenance. Creating a structure that works is all about the management of the scope of work and expectations. Structure in the business gives a business owner the liberty to think freely about the future of the business without worrying so much about the present.
Every team member should know and understand their functions in the organization and then, their contributions to the vision of the organization. You as the business owner is 100% responsible for the entire business, its success, and failure, meaning, therefore, that it can be difficult delegating work to employees and trusting them to carry out the work as well as you will but it’s important that you trust people you have empowered.
You have to give them the knowledge, tools, expectations and guide them to flourish in their responsibilities. Creating a structure will help with sustainability in the business.
There is a need to outline the different departments or functionalities, assign employees to them, set up processes, activity plans and reports to have an overall view on work and business at large, knowing, however, that there’s no one size fit all structure for all businesses, especially a small business. The best approach is to outline a structure based on functionality or specialty.
You lay a foundation that can manage the business and adjust from time to time to fit every stage of it, setting clear precise job descriptions hinged on a structure that manages the functions and objectives of the business. Empower your employees with knowledge and processes and create accountability by setting goals and reports and listing out key functions of the business and how they would lead up to achieving its objectives. Sourcing, production, operations, accounting, logistics, among others in a simple manufacturing business are examples of the functions to be managed by a structure.
Job descriptions are usually overlooked by small business owners, but according to Myles Munroe, when the purpose is not known, abuse is inevitable. Set clear precise job descriptions for yourself as a business owner and your employees to make everyone clear about their purpose in the organization and expectations. Employees may have one or multiple job roles. The important thing for multiple job roles is for the job description to be related or interwoven but ensure that you don’t give one employee most of the reigns within the business. It helps in the event that an employee is unable to come to work for any reason and has all functions down at the same time with nobody capable to step in to help.
Make sure your employees realize their significance to you, the team, and to the whole business. Employees should be partners and referred to as partners, for example, production partners, customer service partners, etc. Empower your employees with processes. Set up clear, concise steps to achieving the work scope and company’s goals. Setting up processes is simply setting up a guide on how you want the business to be run, something of a series of steps/activities/tasks put in place to ensure delivery of a business’ objectives and vision.
Like we have learned before on processes, it creates an environment for consistency in delivering products and services, helps with time management, effective management of employees and curbs waste, and more. Set goals and reports to analyze performance, a business owner, being the general overseer of all functions in a small business. Daily, weekly and monthly reports that give a clear picture of the activities of the business and performance should always come from the different departments. The reports should measure the performance of functions in the business in relation to its objectives.
For example, if your business’s objective is to reach xx revenue in a few months, you should see reports on the sales, specific products or services delivered, bestselling and worst selling product lines, marketing reach, and customer conversion analysis, among others daily, weekly and monthly. They should be direct reports that will give any business owner insights on revenue even if it’s the function of other employees to create the sales revenue. Having an overall view will help you make decisions as a business owner that will benefit the business’ objectives.
Although creating a structure in your business isn’t a smooth and easy path, it helps manage a small business less tasking.
On the whole, you must decide on how involved you want to be. While operating as a sole proprietor is certainly the easiest method, doing so clearly shows you’re more interested in building income for yourself rather than building an actual business. It almost never makes sense to conduct business in your own personal name as operating in that manner exposes you to the worst of everything: The worst legal liability, the worst tax rates, and the lowest chance of being able to ever sell your business in the future. It’s also essential that you distinguish between your private belongings and the business, putting into consideration the effect mixing up your personal resources with the business’ could have on future funding requirements of the business.
Even naming your business has to be with funding in mind as banks and traditional lenders prefer to lend to certain types of businesses more than others, some businesses, being less attractive to lenders than others, particularly the sole proprietorships. It makes it better to operate a limited liability company and avoid evenly split business structures for cutting-edge ones.
Creating a new business is incredibly exciting and utterly terrifying as well. But going as we have highlighted on a firm foundation will make it tower above all obstacles and remain on a strong foundation forever.