When a business doesn’t have professionalized processes in place, it’s obvious. Their performance is erratic and unpredictable. Instead of clearly organized methods and practices for accomplishing their operations, they’re essentially throwing spaghetti noodles at the wall and seeing what, if anything sticks.
That’s not an efficient way to run a business. By replacing that haphazard approach with a proven, reliable and scalable set of practices, those processes perform more consistently. In other words, it becomes “professionalized.” Every business has processes that benefit from being professionalized, from production to HR, and from finance to sales.
If you’re an entrepreneur, how do you know where to start the professionalization process for your business? You might have a dozen different processes to professionalize, and no obvious first step. In that case, it can be helpful to consider how an investor or lender might view your business.
One of the early plays in the investor playbook is to seek out businesses that haven’t yet professionalized their operations. For instance, this might mean finding a startup that has a high-gross profit margin, but is still struggling with seeing a consistent level of sales. By investing a relatively small amount to professionalize that side of the business, an investor can start to see a return on their investment very quickly.
Here’s the good news: You don’t need an investor to do the work for you. Any entrepreneur can learn to spot the places in their business where professionalization will make a meaningful difference. Professionalization should be a holistic process. It’s all about diving into your business and dedicating yourself to making it more efficient, more focused, and easier to operate.
Let’s break this concept down into two larger buckets: Generating revenue and managing expenses.
On one side, we have all the people and activities that go into generating revenue. This usually means the sales side of your business, but it can also include things like marketing. On the other side, we have every part of the business that contributes to the cost of the product. This can be manufacturing and labor costs, but it also includes related costs like rent and utilities, as well as staffing costs for people who are doing the bookkeeping or answering the phones.
Where do you start the professionalization process? For me, it would be sales. I’m a huge advocate for the importance of sales in any business context. The biggest problem most businesses have is revenue, and there’s no better way to increase revenues than by beefing up sales.
By taking the pressure off the revenue-generation side of the business, a solid sales team can also provide you with the financial capital, resources and time you need to develop other aspects of the business. In my experience, a professionalized sales process always solves more problems than it creates.
Let’s say that you’ve done the hard work of professionalizing your sales. What’s next? What process should become the focus of your attention? That’s a big question, and I’ll cover it in part two.