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How to Analyze Your Business Processes

By Denis Jakuc

Your business processes are the activities that together make up the way your organization works. Your core businesses processes are the activities that would make your business stop if they stopped functioning. To determine which processes to analyze, identify those that contribute the most to your business’s success.

What are your business processes?

Small businesses typically have five to 10 core business processes. Here are two lists to help you identify them:

Basic core business processes

  1. Product or Service Development
  2. Quality Assurance and Product or Service Delivery
  3. Sales and Marketing
  4. Accounting and Technology
  5. Administration (Management, HR, and Finance)

Expanded list of core business processes

  1. Product or Service Development
  2. Product or Service Delivery
  3. Marketing (Strategy and Channels)
  4. Sales
  5. Quality Assurance, Process Improvement, Change Management
  6. IT (Technology Management)
  7. HR (Employee Development and Satisfaction)
  8. Accounting Management
  9. Financial Analysis, Capital Management, and Reporting
  10. Business Strategy and Governance

Why analyze these processes?

To become successful and stay competitive as a small business, you need to identify, document, and continuously improve your processes. Analyzing and improving them will result in higher revenues, lower costs, happier employees, and more satisfied customers. Fine tuning your core business processes will make them more efficient, more effective, and more agile in today’s fast-changing world.

Analyzing your processes makes your business more systemized — and more valuable. It becomes a systems-dependent, instead of a people-dependent, operation — a business that can work without you! This gives you the options to: maintain the business, grow it, step away and let others run it, sell it, or franchise it.

How to perform a process analysis

  • Define your goals: Establish what you want to achieve from your business process analysis — for example, increase efficiency, introduce automation, or make sure things are done correctly, the same way, by every person, every time.
  • Identify the processes to analyze: Go to your list of five to 10 core business processes and begin with the ones that are underperforming. Be sure to clearly identify the start and end points of each process, so the scope of your analysis is manageable.
  • Collect as much information as you can: Conduct interviews and brainstorming sessions with all the stakeholders involved with each process. These are the folks who will best be able to articulate the issues and identify the bottlenecks.
  • Visually depict all aspects of the process: Create a business process map by sketching out a clear flowchart. Or you could use workflow software that lets you design a business process map by dragging and dropping tasks on a dashboard.
  • Analyze the process as it now exists: To identify inefficiencies and areas for improvement, look at places where you interact with customers, activities that add high value, time-wasters, bottlenecks and other sources of delays. Then:
  • Do a value-added process analysis: Look at every aspect of a process to see whether it adds value to the process or the organization. Your business process map may be useful here.
  • Do a root cause process analysis. Look at the reasons behind a process problem, and some possible solutions. For example, you may find a labor-intensive process for onboarding customers that can be easily automated with a user-friendly software platform.
  • Pinpoint the areas with the greatest potential for process improvement: Go back to the goals you set. The improvements you should help meet those goals. Be sure to discuss your findings and recommendations with the stakeholders who will execute them. Brainstorm all possible solutions. Determine how each one will impact your business, short- and long-term.
  • Document the new process: Write down, in simple bullet-point form, how the new process works. Organize it around who does what, and when.
  • Commit to continuously improving your processes: Put every process on a regular schedule to review at least once a year. These reviews can be very quick for processes that keep working well, and are very necessary for processes that are holding things back.

Memorialize the business processes

So, you hire a new employee or indeed have a whole change in staff. Do you want to provide them with a success map?

The company processes need to be written down, and made accessible to those employees completing any set of complex processes. For example, in the medical device field what are the steps to develop the product, to determine if there is a market fit, to financially qualify if the product should go to market? What are the processes involved in getting FDA approval?

All of these process questions need to be documented. Yes, processes need to be constantly adapted based on the need to improve them. But the company needs to start with a robust set of guidelines to provide direction and maintain expected quality of outcome.

 

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This Expert Summary is © InnovatorsLINK. For republishing, please contact dlangeveld@innovatorslink.com.

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