“What are the main differences between the vegetable kiosk in your neighborhood and Safaricom?”
This is an illustration I use a lot in coaching sessions. I normally ask individuals to compare small businesses such as the vegetable kiosk in their neighborhood with a company such as Safaricom, Equity Bank or Coca cola, which are some of the most successful businesses in Kenya.
Small business versus big business
One major difference between the two business models quoted above is that one is a small, one man or one woman show with no business systems while the other one is a business system so it is not dependent on a single individual to run.
There is a reason why some businesses grow to become multi-billion dollar ventures and last for generations. One thing that the world’s most successful businesses have is systems.
A company like Coca Cola has systems governing every process in their operations; the process of manufacturing the product, safety in their premises, marketing strategies, hiring and firing, packaging and distribution.
Do you own a business or a job?
You have taken an important step to set up your own business. Congratulations! You probably are the heart and soul of your business and without you, there would be no business. You are on the right track.
Learn everything about your business and document each and everything to the minutest detail. Establish systems that govern all areas of your business; the people, the processes and the strategies.
Nothing about running a business should be dependent on an individual’s memory, however minor. Your business should be able to run efficiently whether you are physically there or no. There should be no need whatsoever to keep on contacting you to ask how to do a,b,c,d or who to contact to handle a particular task.
Business systems unlock the key to sustainability
Business systems refers to well documented and detailed procedures that are to be followed in order to accomplish any given task. They are written down step by step instructions about every aspect of the business.
Maybe you run a small food processing business from home. You document each and every detail from where you source the fresh foods, contacts of the suppliers, how you negotiate prices and the amounts you purchase. Do you purchase in crates or sacks?
You document the processes to the minutest detail; how you select the foods to process and which ones are discarded, how you prepare them for processing such as washing and drying, each and every equipment you use in processing including details about how each equipment is operated.
Store the information in an organized manner where it can be accessed easily if needed, a filing system that can be accessed without the need for someone to explain.
Document the procedures in detail, where you source materials, the exact amounts you use to make each product, specifications of packaging and every detail.
Document everything about your business including the staffing needs; relevant procedures like hiring, disciplinary action, firing and terms of service for staff.
Your business is a different entity from you
Build your business to be a separate entity from you, an entity that can survive even if you were no longer there. Constantly ask yourself the question; “Can my business operate smoothly if I was to be in a coma for 6 months?”
Putting systems in place is critical for business sustainability. Some businesses end as soon as the founder is no longer part of the business. No one else knows anything about how the business runs. If your business can operate even better and grow in your absence, then you have put in place good systems.
Putting systems in place also enables you to train and supervise staff effectively whether they are part time or full time. It ensures that as long as you select the right people, your business is able to run smoothly at all times since everyone simply follows clear systems.
In the initial stages of building the business, you might be the only one working there such that you do everything. That does not take away the need to put systems in place, which is very important if you are to build a solid business that will secure your future.
A solid business should outlive the founder. It should be able to survive several generations without hitches. Putting systems in place makes that possible.
Business systems set apart a successful business from all other players in the market. I will quote three successful businesses that we are all familiar with: Safaricom, Equity Bank and Coca cola.
The distribution channels of these 3 companies set them apart from the small solo entrepreneur kind of businesses. The services of these 3 companies are accessible to just about everyone even in the remotest parts of the country almost to their doorsteps.
You can leave your house and within 5 or 10 minutes you have access to these services. If you look clearly, you will notice that these companies utilize existing structures on the ground such as supermarkets, restaurants, kiosks and shops as their distribution channels.
These companies do not own the outlets they use for distribution but they use other people’s outlets and compensate them. This is the key to business success. The convenience of customers when it comes to accessing goods or services determines a company’s success.
There might be other players in the same industries whose products or services might actually be more superior to those of the companies I have quoted but they cannot beat these giants because they reach large portions of the population.
No matter how great a product or service is, if you had to get it from hundreds of kilometres away, you are likely to look for an alternative that is easier to access. The distribution channels will make or break your business.
Are you in business and would like to scale it up to a level that it can run smoothly even when you are away? Book a free session of the coaching program I have put together Turn your business into a cash cow here to help you assess if the program is for you.
Financial Independence Africa