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Tag: Processes

  • Take These 5 Steps to Future-Proof Your Business | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Small businesses are facing strong headwinds in today’s dynamic business environment. Technology is evolving faster than entrepreneurs can keep up with, market and consumer demands are constantly changing, and there seems to be a new economic or geopolitical disruption every week. Surviving in this landscape requires businesses to have robust strategies and systems in place while simultaneously remaining nimble. This pressure is exceedingly difficult to tackle as the business grows.

    To thrive in this volatile business landscape, a comprehensive and resilient strategy is absolutely essential. This involves establishing robust frameworks that allow your business to absorb shocks and swiftly recover from constant change. With technological advancements, particularly AI, businesses must proactively adapt their operations and integrate new tools to avoid being outpaced by agile competitors. Developing a strategy that ensures core functions remain stable under pressure while aligning with your personal and professional vision is paramount for long-term success.

    Related: Follow These 7 Business Strategies to Future-Proof Your Business

    1. Audit and streamline operational processes

    The foundational step to future-proofing your business is to have a deep understanding of your business’s operational processes. The good news here is that for startup entrepreneurs, you were likely involved in their creation. The bad news is that it can be difficult to spot inefficiencies because of internal biases, which is why it’s important to engage other members of your team to participate in the process.

    Start by mapping out all of your critical business processes. Having clearly documented processes allows your business to function like a well-oiled machine. It ensures that everyone is on the same page and working together. As you go through this exercise, look for opportunities to improve tasks that are repetitive, time-consuming and prone to human error. By formalizing your processes, you are future-proofing from the standpoint of reducing dependency on the founder and ensuring critical operations aren’t reliant on a single person.

    2. Leverage technology for automation

    Once you have clearly documented processes, you can strategically leverage technology, including AI, to automate repetitive tasks and drive efficiency. This entails developing a technology roadmap to identify gaps, research emerging solutions and plan seamless integration.

    It’s important to prioritize solutions that solve specific problems and integrate smoothly, such as AI-powered chatbots for customer interactions, predictive analytics for inventory and automation for administrative tasks. Thoughtful implementation can boost efficiency, minimize errors and free your team for strategic work.

    In addition, automation should generate actionable data, allowing your team to identify areas for continuous improvement and proactively spot future disruptions.

    Related: 90% of Your Business Could Be Automated With Just These 4 Tools

    3. Build a culture of delegation

    While technology provides powerful tools, a business cannot truly scale if decisions and critical tasks consistently bottleneck with the business owner. This is why a pivotal step in future-proofing involves actively building a culture of delegation and empowerment within your team. As a business owner, it’s critical to start systematically delegating tasks and responsibilities by providing clear guidelines, comprehensive training and the necessary authority for team members to succeed independently.

    The ultimate goal is to foster an environment where employees are encouraged to take ownership, proactively solve problems and contribute ideas. From a future-proofing perspective, a strong, empowered team is fully capable of adapting and performing effectively even in your absence.

    4. Develop a talent strategy

    Your team is your greatest asset. A solid future-proofing strategy involves more than just hiring. It means actively attracting, developing and retaining adaptable talent, skilled in new technologies. For your existing team, be sure to invest in ongoing training and skill development to ensure their capabilities keep pace with technological advancements and market demands.

    A skilled and adaptable workforce is essential for navigating change, implementing new strategies and embracing new tools. A proactive talent strategy ensures that your team is prepared to meet future demands and leverage emerging technologies effectively.

    5. Foster a mindset of continuous innovation

    To truly future-proof your business, entrepreneurs should encourage a mindset of continuous improvement and innovation. You can do this by encouraging experimentation and allowing your team to make small mistakes and learn from failures. By building agility into your operational planning and decision-making, you are setting up the team to be nimble when unforeseen market challenges arise. Having a culture that embraces change and actively seeks new ideas will enable you to better identify and capitalize on future trends, rather than being overwhelmed.

    Related: The Power of Continuous Innovation — and 3 Easy Ways Your Company Can Achieve It

    There is a lot of uncertainty about the future. With rapid changes due to technology and other factors, it’s impossible to predict the resources, skills and strategies businesses will need to survive. It’s critical for every entrepreneur to take the time to carefully consider what they can do to strengthen the resilience of their businesses and position themselves to take advantage of new and emerging opportunities.

    Small businesses are facing strong headwinds in today’s dynamic business environment. Technology is evolving faster than entrepreneurs can keep up with, market and consumer demands are constantly changing, and there seems to be a new economic or geopolitical disruption every week. Surviving in this landscape requires businesses to have robust strategies and systems in place while simultaneously remaining nimble. This pressure is exceedingly difficult to tackle as the business grows.

    To thrive in this volatile business landscape, a comprehensive and resilient strategy is absolutely essential. This involves establishing robust frameworks that allow your business to absorb shocks and swiftly recover from constant change. With technological advancements, particularly AI, businesses must proactively adapt their operations and integrate new tools to avoid being outpaced by agile competitors. Developing a strategy that ensures core functions remain stable under pressure while aligning with your personal and professional vision is paramount for long-term success.

    Related: Follow These 7 Business Strategies to Future-Proof Your Business

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    Nicholas Leighton

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  • How to Free Up More Space in Your Business for Creativity | Entrepreneur

    How to Free Up More Space in Your Business for Creativity | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Like most business owners, you probably wish there was more time in the day. Finding the balance between meeting necessary deadlines and keeping space to be creative can be tough. But creativity in business is essential, and losing it means losing out on innovation, efficiency and (ultimately) revenue.

    So, it’s vital to free up some space in your business for creative endeavors — especially considering three-quarters of small business owners said that inflation affected their bottom line between July 2021 and July 2022, and 56% expect to feel the pinch through at least the summer of 2023. Creative solutions can mean the difference between financial success and failure.

    From a survey of more than a thousand executives, Deloitte found that so-called “high-growth brands” are more likely to value creative ideas as part of long-term success. These brands — in contrast to brands with less measured growth — also are more likely to intentionally create an environment that fosters creative thinking and cross-collaboration. Creativity is a key factor in innovation, which ultimately determines a company’s growth over time.

    One common reason business owners struggle to find creative time for themselves is that they’re hiring people but not delegating effectively. As an owner, you can’t handle everything on your own. Though it’s important to ensure quality, you must find a way to delegate tasks if you want to maintain balance, stability and creativity. Research from the Annual Review of Psychology shows that we need time for our brains to wander between tasks to fully realize our creative potential. However, it’s hard to find that time when you’re trying to do it all yourself.

    The simple truth is that a business can’t grow when its owner is consumed with micro-managing every facet of the organization. Instead of spreading yourself thin, focus on the part of your role that adds the most value, prioritize it and let it grow. Delegate tasks and share authority where you’re able. The goal? A company that can function without your constant supervision, leaving you space to bring in new passion and creative ideas.

    The qualities that make up an efficient system and leave room for creativity

    As a leader, you must endeavor to build systems that help you find more creative space instead of more tasks for your list. Here’s where you should focus your efforts:

    1. Processes

    Regular processes enable you to oversee different aspects of the business and maintain quality without micro-managing every detail. Not only can poor or inefficient systems or strategies lead to chaos and capital loss, but having efficient processes also means spending more time doing what you’re good at, being creative and making better strategic decisions.

    A great start would be to improve the day-to-day routines that keep your company running. Successful processes are clear, can be replicated and documented, have supporting tools and are easy to access.

    Well-designed and well-implemented systems (including financial, technology, marketing, people and operations systems) create consistent experiences for customers and employees and make your business run more smoothly. Concrete processes, outline how things should be done and provide a way to improve them, saving you time and energy you can spend elsewhere.

    Related: How to Take Marie Kondo’s Approach for Workflows and Processes

    2. Roles

    A big challenge in creating more space for creativity is having well-defined tasks for everyone on the team. You must have a clear job description for every role in your organization. As your company grows, you’ll delegate tasks to many employees and having defined roles helps you manage payroll more effectively, set performance expectations and outline innovation opportunities.

    Perfectly assigned roles are crucial for business because, according to LinkedIn, ineffective management can lead to low morale and budget overruns. This can manifest in poor planning or role definition or more personal things like failure to coach or innovate within roles. Buck this trend by clearly defining your team’s scope of work.

    Related: What If a Boss and an Employee Swapped Roles? We Tried It.

    3. Skills

    After you have determined your company’s roles, you can assign specific, necessary skills to each one. By clarifying which skills are valued and required in each role, you empower your employees to focus their time and efforts on the skills that will most help them grow in their role. By narrowing their focus, you free up more time and headspace for innovation and creativity.

    Skill assignment also ensures you hire the best-qualified candidates and place them in the most productive roles for your organization. Skill testing should be an important part of hiring, too. McKinsey says that 87% of employers see current or potential skill gaps at their companies. Skill testing and clarification can help close those gaps.

    Related: How to Acquire Soft Skills and Measure Them Successfully

    4. Structure

    The best way to create an effective organizational structure is to design it before you need it. As with systems optimization and role definition, providing organizational structure means employees spend less time confused and more time doing the important work you hired them for. Progress will stall if an employee has a question and doesn’t know where to ask for the answer. Provide structure and reduce confusion.

    Toyota is a great example of how structure can impact time management. The Toyota Production System (TPS)

    is a program that encompasses all of Toyota’s practices and philosophies, from sourcing materials to customer interactions. TPS was a key factor in the development of “lean manufacturing,” which focuses on efficiency in production. The right systems help you prioritize and manage your time so you have the freedom to work on developing your business with creative solutions rather than simply maintaining it.

    One way to quickly simplify inefficiencies is to remove unnecessary steps in company procedures. An audit is one way to accomplish this, but automation is another modern solution. Automation can identify and solve company growth issues, reduce wasted resources in poorly designed systems and maximize profits.

    As a business leader, your priorities should be achieving amazing customer outcomes, maintaining a healthy company culture and finding innovative opportunities for growth. By optimizing the systems, processes and roles in your company, you spend less time managing and more time doing what you do best.

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    Drew McLellan

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  • What Is Business Process Management (BPM)? | Entrepreneur

    What Is Business Process Management (BPM)? | Entrepreneur

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    There are best practices, standard operating procedures and several types of processes in the business world. Processes help maintain order and provide guidelines for a smooth workflow. They are what makes businesses tick.

    One of the essential tools a business can utilize is business process management (BPM). Keep reading to find out everything you need about what it is, different types, benefits and use cases.

    Related: The 10 Golden Rules of Effective Management

    What’s the definition of BPM?

    Business process management is a broad-scope end-to-end process that includes methods that promote discovery, modeling, analysis, improvements and optimization of business processes.

    While it might sound similar to task or project management, BPM offers a more extensive scope. Task management zeroes in on individual tasks and project management is a one-time work process; business process management is an end-to-end repeatable process.

    A successful BPM can streamline workflow, increase efficiency and reduce costs.

    The best business process management systems:

    • Incorporate advanced analytics.
    • Monitor all business activity.
    • Utilize decision-making management.
    • Coordinate employees.
    • Synthesize systems.
    • Maximize pertinent information to accelerate digital transformation.

    Related: 5 Project Management Systems to Streamline Your Business Processes

    What are the types of BPM?

    Three core types of business process management are used to create efficiency in the workplace.

    1. Integration-centric

    Integration-centric BPM focuses on the processes that are mainly outside of human involvement, like application programming interfaces (API) that allow businesses to automate and standardize processes for departments, including human resources management (HRM) and consumer relationship management (CRM).

    For example, an ecommerce website can use a platform or software to automate its fulfillment and shipping processes, meaning that the interface would complete the task from ordering to the warehouse to shipping.

    BPM focuses on end-to-end processes, and an integration-centric process can improve efficiency and agility while reducing the risk of error in the operation.

    2. Human-centric

    Human-centric business process management focuses on the people of the business, including their satisfaction, motivation and engagement. Processes must be user-friendly, efficient and effective to provide a positive user experience.

    This sector of BPM is essential because it is employees that make a company what it is. This process helps shape the company’s culture by fostering continuous improvement through feedback and adjustments.

    For example, involving employee teams when implementing a new process allows you to get their opinions and troubleshoot kinks in the system. Not only can this make for a more effective system, but it can also make employees feel valuable and satisfied. Employees who enjoy their positions and feel appreciated are more likely to be productive and loyal to their company.

    3. Document-centric

    Businesses must keep accurate and efficient documents, and document-centric BPM exists to manage the flow of paperwork. BPM is an end-to-end operation, and document-centric means focusing on different stages of paper-based processes so the correct information is always available to the right people.

    Document-centric BPM can include digitizing paper documents, adopting document management systems and using electronic signatures or other document automation processes.

    For example, when an employee receives an invoice, BPM includes managing it from receipt to approval and ensuring the right people see it along the way.

    Related: 5 Things Disruptive Startups Must Consider When Setting Up Business Processes

    What does the lifecycle of BPM look like?

    One of the most critical aspects on the ground floor of business process management is making sure there are defined steps.

    When each step is defined, it is easier for team members to identify flaws and track improvement through data at each phase. Clarity promotes better business outcomes.

    Take a look at the six lifecycle steps below.

    1. The planning process

    When brainstorming a new process, a clear plan must be laid out at the beginning. Strategic planning should identify organizational goals and analyze the current processes to use as a starting point for improvement. There are three processes to explore, including:

    • Primary processes: These are the core processes that make an organization tick, including product development and sales.
    • Secondary processes: These support the primary processes through business operations like supply procurement, HR, IT and facilities.
    • Management processes: Management observes and analyzes primary and secondary processes to create more efficiency throughout the planning and execution.

    Related: Learn Product Management Secrets with This Bundle

    2. Analyze organizational processes

    Once you have figured out business goals, you must analyze the current processes to see which parts do and do not align with those goals.

    You should use both qualitative and quantitative analysis techniques to get the whole picture before moving forward.

    Related: 4 Steps to Setting and Achieving Your Goals in 2023

    3. Design the ideal model

    Depending on the analysis, during this step, you will either design an entirely new BPM or make some tweaks to promote the efficiency of your current BPM.

    Once you have decided what needs to be changed, it’s time to examine how to create it. This is a mini-process in itself, which includes the following:

    • Identifying what the work will entail.
    • Decide how many workers you will need and from which specialty.
    • Decide on tools, techniques and methodologies.
    • Create a step-by-step process for the work.

    4. Implement necessary change

    After the new process has been created, it will need to be implemented. Ensure clear guidelines and expectations for this change and a feedback process.

    Related: 3 Ways Change Leaders Prevent, Minimize and Manage (or Create) Resistance to Change

    5. Monitor new BPM

    While it would be great to create a new process and let it be, that is not the reality of BPM.

    You must manage, monitor and track how the new process is working, if it is creating more efficiency and track business metrics to show progress. Set up a calendar by which you check processes to promote consistency.

    6. Refine new BPM, repeat

    As you figure out how the new process works through progress monitoring, refine it as you see fit. Continue repeating the six steps whenever a new process needs to be made, or changes are necessary for a current operation.

    Related: 5 Ways to Improve Corporate Learning Initiatives

    What are the benefits of business project management?

    BPM promotes the organization of a business and its procedures. Because of the organizational strategy, BMP benefits include:

    • Creating a company culture of adaptability.
    • Increasing customer satisfaction.
    • Generating revenue growth.
    • Potentially reducing costs.
    • Boosting overall employee morale.
    • Offering stronger security.
    • Creating an accountability norm.
    • Improving the reliability of the information.
    • Promoting employee productivity.
    • Increasing overall business efficiency.
    • Providing consistent data and analysis.
    • Making scaling a more straightforward task.
    • Promoting regulation compliance.

    Related: Building An Executive Management Team: The How-To

    How can you use BPM for your business?

    Business process management must be a part of your organizational structure to promote business efficiency. From functions of management and employee engagement to staffing and corrective action, there must be processes in place.

    Not only must those processes exist, but they must be updated consistently to maintain alignment with an organization’s goals. If you are looking to boost your business strategy, then BPM is the first place to start.

    Are you interested in learning more about management tools, business initiatives and more? Visit Entrepreneur.com for everything you need to know.

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    Entrepreneur Staff

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  • 4 Reasons Your Business Needs Cash Flow Forecasting

    4 Reasons Your Business Needs Cash Flow Forecasting

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    Opinions expressed by Entrepreneur contributors are their own.

    You might have heard that the biggest cause of business failures is cash flow issues, but to what extent is the severity of this widespread problem? To put things into perspective, more than 80% of business failures are due to a lack of cash, 20% of small businesses fail within a year, and half fail within five years.

    But it doesn’t have to be that way. In fact, many businesses can avoid cash flow problems with proper cash flow forecasting. Cashflow forecasting helps businesses predict when issues may arise and allows them to take action proactively to avoid cash flow gaps.

    That said, many businesses already operate at max bandwidth, and cash flow forecasting isn’t on business owners’ minds. It’s usually already too late when business owners are hit with a financial setback and realize they don’t have enough cash to cover it.

    Many business owners don’t realize that the scope of benefits that derives from good cash flow forecasting goes light years beyond helping the business plan its operation. If you are still thinking about why you should bother with it, here are a few reasons why you should do cash flow forecasting:

    Related: Often-Overlooked Ways Entrepreneurs Can Improve Cash Flow

    1. It helps businesses avoid cash flow gaps

    This is the most straightforward and important reason why cash flow forecasting is crucial.

    Here’s a scenario for you: John’s client promised the payment would be deposited by today, but there has been a mix-up, and the bank said John wouldn’t get the money until next week. John is expected to pay his vendors tomorrow, but without receiving the payment from his client, he doesn’t have enough money to pay. The cycle continues.

    This is the reason many businesses fail.

    A cash flow forecast helps businesses avoid this very situation. They can use a forecast to project best-case scenarios, worst-case scenarios and everything in between. They can then use that to make prudent decisions about how much money to spend, where to put it, and when to spend it.

    If they think there’s a chance cash may not come in the door, the business could decide to put off a big purchase. Or they could talk to vendors and get an extension on payables. Or they could offer customers a discount to pay their bills early. The forecast gives the business the knowledge they need to take action and avoid difficult cash flow situations.

    Related: 4 Tips for Managing Cash Flow in a Seasonal Business

    2. It helps secure loans

    Loans are an important part of running any business. Financing can help a business expand, improve its products and workflows, or cover operational costs in a crunch.

    However, obtaining financing is easier said than done, especially for businesses with little assets or no credit history. In this case, lenders look at profitability, expenses and cash flow.

    A strong cash flow forecast helps a business prove its creditworthiness to lenders. A business can use its cash flow forecast to show that it deserves a loan and is a good credit risk. Or, if your cash flow forecasting shows otherwise, maybe it’s a good time for you to assess internally and improve your cash flow position before going to a lender for a loan.

    3. It helps businesses make better decisions

    A cash flow forecast gives a business a glimpse into the future. It helps them view when cash is coming in and going out, so they can better plan for the future and make strategic decisions that align with their budgets.

    Let’s say a business is considering hiring additional staff or purchasing new equipment. A business might look into how much money they have right now, thinking they could cover the extra expense. But what if the business lost a major client a week from now? Or what if sales suddenly plummeted due to competition?

    These are the kind of things that your account balance can’t tell you and are the exact reasons businesses need cash flow forecasting. By understanding their future cash availability, businesses can make informed decisions about when and how to invest in their growth.

    Related: How to Inflation-Proof Your Small Business

    4. It helps businesses set measurable goals

    Leveraging cash flow forecasts can help businesses set measurable goals to improve cash flow tangibly and determine the path to better business outcomes.

    If a best-case scenario forecast says you can potentially grow your business revenue by 50% by improving your operation with a new equipment purchase, you now have a benchmark number.

    Or, if you plan on reducing expenses by 20% by cutting out parts of your business operation, cash flow forecasts can help you see the business and revenue impact of cutting out a project and if the financial cost reduction is in line with your decision. You can now set data-driven business goals, know what outcome to expect, and measure success.

    That’s two drastically different examples, but no matter what situation your business is in, cash flow forecasting can help a company set measurable goals.

    Forecasting for your business is easier than you think

    Here’s the thing about cash flow forecasting: It’s not new, but it used to be a challenging, labor-intensive, and time-consuming job that business owners would task their accountants with. The good news is that innovating technology makes cash flow forecasting easier than ever before. New tools now directly integrate with many cloud-accounting platforms that businesses use, making cash flow forecasting faster, more accurate, and sometimes even for free. Start looking for a solution that works with your accounting platform today, and see the wonders it can do for your business.

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    Nick Chandi

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