Evaluate your business operations for efficiencies and strong economics, including internal controls.

Business owners go into business for different reasons. Some are lifestyle entrepreneurs who crave the freedom of being their own boss. Some want to change the world and leave a legacy. Some are in it for the money, while others want to follow their passion.

Generally, business owners don’t think about internal policies, procedures, and controls when launching their businesses. But organization and discipline within a company is one of the top ways to drive company profitability and value. Proper internal controls enhance product and service quality and cost-efficiency.

Where To Start?

Start by focusing on equipment and documented operations and systems. Below are questions to guide you through this task.

Equipment:

• Take an inventory of equipment and record the details. Include the description, location, condition, purchase date, and purchase price in a database. Microsoft Excel will work.
• Are machinery and technology efficient and in good working order?
• Are computers, databases, and software state-of-the-art and up-to-date?
• Are service agreements in place to maintain all equipment?

Well-documented operations and systems:

• Are there user manuals for all equipment?
• Are safety procedures in place for all equipment and operational tasks?
• Are programs in place to train employees on new equipment and systems?
• Are there SOPs (Standard Operating Procedures) in place for all processes and procedures? Are they accessible and in a centrally located shared computer folder? Are they updated regularly?

 

You don’t have to do the work yourself. You may be able to delegate this work to someone on your team or hire a temporary employee to inventory equipment, to gather service agreements and user manuals, and to prepare documentation based on interviews with employees who are familiar with the undocumented processes and procedures.

After you complete the task, identify ways to improve efficiencies, eliminate waste, and reduce costs. Identify and quantify upside sale value opportunities, such as property, equipment, and other surplus assets.

Do one thing: Evaluate your business operations for efficiencies and strong economics, including internal controls, documentation, and production of products.

Thanks for reading.