Know about Your Business Requirements? Sell or Stay? Part 2.1

Let’s continue from our last issue. We reviewed the minimum requirements a buyer must gain when buying your business. He or she must consider the following before the cream in your offer:
● Scalability
● Focus
● Competitive edge
● Business model
● Cash flow
● Customer base
● Legal structure
● Business team
● Financial backbone

As part of Scalability, we considered the need for your business to be repeatable. Let’s now continue with the scalability requirements of two aspects: teachable and valuable.

 

Teachable

Do you have consistent business rules about your processes, or are you the only person who can make the decisions on a case-by-case basis? This is similar to asking, “If you’re having a bad hair day, does everyone get the brunt of it? When you’ve had a great night, is it bonuses all round?” Are you the only person who can make things work, or do you utilize other clever people? Have you broken the work down into easy-to-manage pieces?

 

Right around the world business surveys show that there’s a shortage of talented people. Lots of business owners are in the same situation you are. This makes it necessary to ensure that ordinary people can be hired at scale to do the work. Automate what you can by building decision rules into your systems; thereby ensuring consistency. But how can you make tasks simpler so that lesser-skilled people can perform them?

 

I have a client who’s a fashion retailer and receives clothing along with a delivery docket. The delivery docket lists each style and then lines up the boxes to show the quantity of each size and colour combination. The supplier is familiar and comfortable with this method, but it’s hell for the retail staff. They have to translate it into individual stock keeping units (SKUs) prior to packaging (via the QuickBooks system). Unless you have someone very smart doing this work, mistakes are bound to occur. Frequent mistakes are exactly what our client experienced every time she had someone else do the work. So we re-engineered the information flow and used simple tools to help her. Here’s how we did it.

 

The supplier now receives a purchase order with the individual SKUs and quantities in Excel. The electronic document is loaded from an email into a database; with only one click. The database then translates the SKUs into the box format of sizes and colours—exactly the way the supplier loves. There’s now no need for retyping the order details, so productivity has increased. Once the product is manufactured, the same database converts these boxes into the client’s SKUs as a delivery docket.

 

This Excel delivery list is emailed to the client and once again, a one-button click loads the receiving information into the client’s database package. Now the client’s software shows the quantities received against outstanding purchase orders. The receiving staff members only have to compare quantities of SKUs on a form on the screen. There’s no more confusing translation or inputs required on their part. Once the receiving validation is complete, another click automatically adds the received quantities to QuickBooks and a list of any receipt discrepancies is prepared and emailed to the supplier. Not only has productivity increased, but this process can be taught to just about anyone without much effort.

 

Entrepreneurs often fail by clinging to the skill set they know well. They keep those tasks to themselves when these are the very tasks they need to teach others. Doing this prevents you from scaling. An impossible situation then develops where the owner, as the expert, is requested by customers personally. The business becomes too reliant on the owner. A business that is too dependent on its owner is not sellable.

 

Next time, I want to discuss how you can add value to your brand and how this delivers on your Brand Promise.

 

Graeme Stevens
CEO and Co-Founder
neXtep easy
www.nextepeasy.com

 

neXtep Business Builder Community Pte Ltd
Singapore ACRA Business Registration Number: 201424522Z
80 Kitchener Road #09-09/10 Singapore 208539