Been gone for a while – things got very busy at work and quite frankly I just lost traction for a couple of weeks but I’m back and I decided to put the last remaining sections in this one post.
My last post was about the operations you absolutely have to get right in order to do whatever it is you want to do: know what your customer wants, plan your work and deliver what you promised. This post will be about the operations that will help you work efficiently and improve over time.
Overview of the Profit Creating Operations
Things you have to get right in order to make a profit. These operations directly impact both your customer and how you run your business.
Work Monitoring and Control
“Are you spending too much and as a result will you take a loss on this contract?”
One of the advantages of performing your critical operations (requirements management, work planning and service delivery planning) is that they provide the key information you need to perform your profit creating operations. Your requirements management efforts provide a clear picture of what needs to be done to satisfy your customer; your work planning efforts identify what has to be done and your service delivery planning efforts identify how it will be done.
With those three pieces of information it becomes a straight forward effort to keep track of the “whats” and the “hows”, that is monitoring and controlling the work so that the right things get done within your budget and your schedule. Do not confuse straightforward with quick or easy. Straightforward in this context simply means that you can clearly see how to do something.
In order to keep track of your work you need to write down the important steps it takes to provide your service and for each step write down how long it takes, how much it costs and when the step must be done. It’s also important to think about what may keep you from meeting your customer requirements, i.e. you spend too much, take too long or start too late on a step. Put all this together and you have a work plan. Congratulations!
You can now use this work plan to track your work which sounds boring and not a lot of fun. It may not be as exciting as watching “House of Cards” but it can give you a good feeling when you start to detect a problem before it actually happens and in time to do something about it. This can include changing your plans, reworking agreements or other things that can help reduce the impact of the problem.
Supplier Agreement Management
“How will you work with your partners, prime and/or sub-contractors?”
As a SOHO business you will probably be working with both suppliers and subcontractors (or partners) and this area is where you determine how you want to set up and manage those relationships. A little preparation will go a long way towards establishing a successful and profitable arrangement for everyone.
This planning enables you to establish the basis of your negotiations:
- What you will require of your suppliers: schedule, cost, quality, quantity, warranty, after delivery service, etc.
- What you will provide your suppliers: method and schedule of payment, feedback, recommendations, etc.
- What will be the relationship with your subcontractors/partners: degree of direct contact with your customer, your fees, in addition to what you would require/provide your suppliers (see above)
Depending on the maturity of your business you may have an extensive list or you may be starting with a blank sheet of paper. Regardless, your wants and needs in this area will change over time based on your experience and changing circumstances.
The more you have thought through this area the more comfortable and confident you’ll be in your dealings with your suppliers and subcontractors/partners. As changes come up, and they will, you’ll be better able to quickly and safely adapt to them.
Overview of the Business Sustaining Operations
So you’re keeping the customer happy and doing it efficiently so you’re done, right? Well, yes for a while at least but if you do this for any length of time there will be tendency to take shortcuts or you may wish to do it a different way or you may wish to expand. All of these things will go better if you periodically look at what you’ve done from a “big picture” standpoint.
Process and Product Quality Assurance
“Are you doing the right things AND are you doing things right?”
The Work Monitoring and Control described earlier is a look at what you are doing on a day-to-day basis. Process and Product Quality Assurance is a look at what you are doing over a series of jobs. This is where you will see gradual shifts away from your original approach. These shifts can be for better or worse but it is important to become aware of them early, especially if they’re for the worse.
An important element of the activities in this operation is developing the ability to view them objectively. This means you will have to measure what is important and do it consistently over time. Your Vision Statement, requirements management, work planning, service delivery planning and work monitoring and control efforts provide what you need to perform this operation.
Measurement and Analysis
“How will you know you are making a profit?”
While Process and Product Quality Assurance will help you identify “drift” over time, the Measurement and Analysis operation will help you determine when and if it’s time to “change course”. If you decide that it’s time to change the course of your business then the results of this operation will help you rewrite your Vision paper and start the entire process over again. You’ll be surprised how much easier it will be the second time because you will be able to tailor the Tiny Business Mentor process to what worked for you the last time, adding and dropping things as necessary.
“Are you’re delivering the right version?”
Configuration management is the tracking of the “things” that are part of your business. These things include any products you deliver to your customer, plans/procedures you may use to deliver services and major hardware/software you use in the running of your business. This operation is left for the last because in most cases it’s not only too much work early in the life of tiny business but it’s also not really necessary.
Next up: Some examples