Helping Your Business Thrive by Optimizing Core Business Processes

Most business owners attribute their success to highly focused sales and marketing, excellent customer relations, high-quality products and services, sound financial management, or high brand awareness. As mundane as it may sound, you can drive your valuation by developing highly efficient and customer-centric business processes. Highly efficient business processes drive value in four ways- freeing up cash flows, reducing expenses, improving your ability to scale, and helping you respond more quickly to market opportunities. This takes discipline, dedication, and creativity.

Freeing Cash

By fine-tuning core business processes, you can take cash out of inefficient processes and put that cash in your bank. Think of your business like a flowing river, except flowing through your business is cash, not water. Like a river, your business processes have twists, turns, and metaphorical boulders- all of which interrupt the flow of cash. For example, if you require approvals before issuing customer invoices, those approvals are like a boulder in your process flow. And just as water backs up behind boulder, your cash flow backs up behind the time it takes your team to complete their approvals.

Although at some point the approval process made sense, many times approvals are just a way to prevent some rarely occurring problem. Frequently, with a little investigation, our clients find such approval processes are required in very rare instances. Subjecting all invoices to the approvals results in extra staff time and delays in collecting those invoices.

Ask your team three simple questions: “What are we achieving by requiring approval of all invoices? Do we really need to approve ALL invoices? And, is there a more efficient way to ensure our invoices are accurate?” Our experience is that your team will quickly identify a more efficient and effective process. And in doing so, you will collect invoices faster- accelerating your cash flow. In short, by removing barriers, you take money otherwise stuck behind our metaphorical boulders and put that cash in your bank. Apply this rationale across the breadth of your core business processes, and you might be amazed at how much faster your business generates cash.

Reducing Costs

Streamlining your core business processes also reduces costs by improving efficiencies. Removing unnecessary process steps lowers the costs of those processes because fewer process steps require fewer staff hours. For instance, simplifying the invoicing process may free up time staff time in accounting, sales, operations, or whichever function participates in the process. As importantly, simplifying processes allows people to work on higher value-added tasks- like selling more products and services and attending to customer needs. In sum, streamlining your core processes lowers your costs now and into the future, further accelerating your cash flow and improving the value of your business.

Scaling Your Business

Scalability is the ability of a business to grow and expand its operations while maintaining or increasing its efficiency and profitability. By generating more with less, you can take on more business with the same level of resources. Suppose your operations staff or salespeople, for example, are not reviewing invoices. What would they do with that extra time? The answer is that they will focus on their core responsibilities- selling and producing more goods and services. With growing cash balances, your business is accumulating the resources necessary to meet the needs of your clients and prospects. Improving scalability is essential to long-term business success and accelerates cash flow, further contributing to an ever-increasing valuation.

Responsiveness

Furthermore, improving business processes enhances responsiveness. Removing obstacles gives your people more time to focus on opportunities. Your people can better identify new opportunities, respond to customers more quickly, produce products more efficiently, and generate cash more rapidly. Over time, your organization becomes so efficient that your business processes become a competitive advantage. You can simply respond faster, produce more efficiently, and provide better service than your competitors. We’ve seen this phenomenon time and time again. Streamlining your core business processes makes your business more responsive, allowing it to generate even more cash flow and therefore further accelerating its value.

A Word About Your People

One significant, but often overlooked, effect of streamlining business processes is your people become experts in core operations. In our experience, your people will also find their jobs far more interesting and intrinsically rewarding By understanding what they are doing and why they are doing it, employees can focus on “what matters.” They begin to ask additional questions, re-examine long-held beliefs, and challenge existing process steps. They creatively find new and better ways of doing things. And when they do, they develop a greater sense of accomplishment. In short, your people begin to thrive.

Conclusion

Done in the right way, a business that continuously improves its core processes is a business that frees up cash, produces more products and services at a lower cost, scales more efficiently, and responds more quickly than its competitors. This is almost a textbook definition of a business that thrives. Such businesses also have motivated, knowledgeable, and innovative people. A thriving business has people who thrive. And businesses that thrive are far more valuable
businesses.

Our team at Thrive Business Operations is here to help you streamline and optimize your core business processes.