3 Essential Steps for a More Profitable Small Business in 2017

Do you want any of these for your business in the coming year? Peace of mind. Consistency. Efficiency. Scalability. More Fun. And of course, more profit. Every leadership team that I’ve worked with seems to have an instant eagerness to improve upon these areas in their business, regardless of industry.

The key to achieving these goals in the new year is a three-step exercise of identifying, documenting, and following your company’s Core Processes. It’s not a sexy solution, but it’s incredibly powerful. And it’s not as painful as you might think.

As Jim Collins said, “Magic occurs when you combine a spirit of entrepreneurialism with a culture of discipline.” So keep an open mind and let’s see what kind of magic is in store for your company in 2017. I’ll walk you through the three steps.

1) Identify Your Company’s Core Processes

Your Core Processes are your WAY of doing business. Every organization has a handful of core processes that make the business run. Usually these include:

• The HR process—the way your company hires, manages, reviews, promotes, retains, and fires people

• The Marketing process—the way your company gets your message to your target market audience and generates leads for your salespeople

• The Sales process—the way your company converts a prospect into a customer

• The Operations process—the way your company makes the product or provides the service to your customer

• The Accounting process—the way your company manages the flow of money coming in and going out

• The Customer Retention process—the proactive way your company takes care of your customers to keep them happy, coming back, and generating referrals for you

On average, my clients conclude on 4 to 10 core processes for their business. One team initially thought they had 27 core processes—they were being way to analytical and overthinking it. In the end, we were able to simplify it down to four: 1) People Process 2) Get Work 3) Do Work 4) Accounting. Everything else fit within these four areas.

2) Document Each Core Process

Document your core processes using a 20/80 approach: just document the essential 20% that will give you 80% of the results. This isn’t a detailed training manual—think high-level Cliff’s Notes. Each process should be between 1-10 pages (think checklists or bullet points).

Your processes need to be usable on the fly, in the heat of the moment. If they’re too detailed, they won’t get used—and errors will erode your profit. By the same token, if they don’t contain the essential steps, key things will get missed—again, resulting in mistakes and errors.

3) Make Your Processes Followed By All

Everyone in your organization needs to understand your Core Processes, and they all need to be following them. Otherwise, your business will be pushing and pulling against itself, or you’ll have gaps that aren’t covered, and your effectiveness will suffer.

Follow these best practices to ensure your processes are followed by all:

1. Put it in a binder or in a shared electronic folder to make it accessible for all.
2. Schedule a meeting to share your Way of doing business with everyone in your company.
3. Retrain everyone to follow your newly documented Core Processes.
4. Manage everyone in the organization to follow your processes.

Gino Wickman says it best: “Systemize the predictable so you can humanize the exceptional.” When the essential predictable steps are documented in a simple high-level approach, it eliminates reinventing the wheel and frees up your people to creatively solve problems.

Leadership teams who go through these three steps consistently tell me that they have more peace of mind, their business is easier to manage, they’re more efficient, errors and mistakes are reduced, the business is more profitable, and everyone is having more fun on a daily basis.

Take the First Step!

So get started—schedule a one-hour meeting with your leadership team. Give everyone five minutes to write down the handful of core processes that make your business run. List them all up on a whiteboard for everyone to see, then pare down the list to the essential handful of core processes that make your business go round. Agree on the name of each process, and assign accountability—so you’re all clear who on the leadership team owns each process.

Want some extra resources? Here are great books that will help to get your team’s gears turning on this approach:

• Traction (free download of chapter 1)
• The E-Myth Revisited
• Essentialism
• Checklist Manifesto

This article originally appeared on the GPS for Small Business blog on December 28, 2016.