From the Editor’s Desk
 
March 1st, 2005

 

by Janet Arden, Editor
March-April 2005

Running Your Business as if it’s for Sale

A business owner (involved in distribution and installation in a completely different industry) told me recently that he runs his business as if it’s for sale right now.

His business is not on the market, and in fact he has only been the owner for a little over three years. But, he has been scrupulous about devising and documenting “systems”—written procedures that specify activities for all aspects of the business—from loading delivery trucks to processing customer payments.

The question, of course, is “Why?”

Making mistakes is expensive. It costs time and materials, not to mention manpower, to correct mistakes. If you deliver the wrong materials to a jobsite or forget a tool, you spend time and money backtracking. If you don’t install the product properly and it fails, you lose a lot of time and money in callbacks, you may lose a customer and even worse, that customer is going to tell the neighbors (or co-workers, or the bridge club) just how much your company messed up on her purchase.

Having systems in place guards against mistakes. Some systems are pretty straight-forward: for example, check lists for what goes on every truck headed for an installation.

Developing and documenting business systems for ordering, invoicing, etc., requires more than paper shuffling. It requires you to walk through each of the business tasks at your company, document the steps, and then review and refine the steps until they are efficient and do-able by anyone stepping into the business.

This last step—“do-able by anyone stepping into the business”—is also an important benefit. It means, of course, that if you sold your business today, the new owner could come in tomorrow, study your systems, and pick up where you left off with your customers and suppliers. More importantly, it means that if the company bookkeeper is on medical leave, someone else really can do that job. If you’re at Coverings, or another CTDA event or even on vacation, business crises are far less likely “back at the store,” because the employees have your systems to rely on.

I have run this theory—Running your business as if it’s for sale—past other business owners and they agree that it’s a worthy goal, although the ones I have talked to say they are not there—yet.

My question to TileDealer readers is: are you “Running your business as if it’s for sale?” If you are, what did it take to get to this point? If not, why not? I’d love to hear from you. Email me at editor@tiledealer.org.

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