Control In Business
I want to share my thoughts around control in business. Many small business owners often believe that they need control over their business, and they exert this by actually being there. So you feel like you can’t miss a single day. You feel like you can’t delegate important tasks, and more importantly, you’re worried about things going wrong. Am I right? I’m sure I’ve been there. I’ve suffered through the same issues. I often found that I ended up doing so many things myself because I was worried that they would reduce my level of control over the business. You know, I’d lose control of essential items. I was even doing my bank reconciliations in my own business when running a software company of all things.
So how do you address this, this need for control? One way is to set effective systems to make sure that you have the right degree of control. You control the things that matter, as opposed to just maintaining everything and hoping nothing slips through. If you get in terms of the risk matrix, some things were not very risky and didn’t require much control. They’re the perfect tasks to delegate. Other things that have a high-risk factor and therefore need a degree of control or processor structured procedures are more important to you. So how does this turn into a practical example in a current business? Accounting is probably a good example of expertise that is pretty well acquainted with the above. Realistically, we suggest clients decide their risk-reward their level of control or materiality.
For example, if you’re running a $10 million turnover rate tile business, you’re not exactly going to be interested in five and $10 invoices. Now, if you have a thousand of those, yeah, it’s going to pop up on that horizon. So what you’ve got to do is make a list of things you need control over in your business. So insofar as what I mean, there is get a bit of paper or a spreadsheet or a word document and make a list and order them in one column. Then in the other column, put down how much impact that has on your biscuit business. Give it a risk rating between one to five and or one to 10, depends on what works for you. Once you’ve done the exercise, save the document, Peter paper, whatever, and go away and leave it, leave it for a week, keep it in the back.
You get mine. But then, when you come back to it, have a look at that document and address that. So you might’ve noticed some things would have moved based on incidents and accidents that occurred during the week. Other things would have dropped off that list. So then you make it a third column. And on that third column, you put your revised ratings. Now you have something to work with. Anything that has shifted during that time will fit into one category or another on our risk matrix. So if it’s gone from something you believed you needed high control to very little control, that’s a perfect candidate for delegation. The reason being is that suddenly you realize that this didn’t create an issue. Things that quickly went from low control to high control need a revisit to see what’s going on there.
Do I need more effective procedures, Or is there something that’s not quite developed? To run an effective business, you need to have systems, and systems are part of a quality control matrix. And quality control is about doing things in a repeatable fashion, the same way every time without fare or file or accident or incident that is indeed the definition of quality. As a friend of mine once said, quality is not about the quality of the product. It’s about the repeatability of the outcomes. And I think that’s an excellent takeaway. When you’re thinking about your business and control, what are the repeatable results you can develop in your business, customer handling service procedures, and stock handling? How do you make sure your staff do that in a repeatable fashion, but more importantly, what are parts of your business, where there is other expertise you could leverage
And what I mean by that is consider what things don’t bring money in the door, but you need to do anyway. Accounting and finance are probably a very high candidate for that because let’s face it, unless you’ve gone and done a degree in accounting. I don’t want to offend any accountants here, but the bottom line is if your business is selling widgets to customers, the last thing you worry about is accounting. You deal with that at the end of the year, and you might manage your business by bank account, which is okay to a point, and I’ll share why that has its challenges.
More importantly, what you need to look at is what processes can you delegate out and what controls are in place for those processes. Now I’ll talk from experience with our platform. We give our client base the ability to authorize down to the individual invoice. Some have a standing authority that says anything that’s contracted; I need to authorize that I don’t need to deal with any stock invoices below a specific dollar value. Then they go through and identify, that’s where they got that from, that was a big purchase. Let me drill down, and they can open up the document and be satisfied that what’s going on. The next level of control is the heavens over the cashflow on our platform. They can tick which payments they want to release a win, or we offer suggestions. When you’re thinking of control in a business, you need to look at the different levels of control and the various business components and how that can free up your time.
Because what you’ll find, when you sit down, you have a look at your list. You see, you want to control many things that don’t directly generate income. And that’s mainly because of that. You feel you’ve got to do everything to be on top of everything. Some most brilliant businesses delegate many critical components of the company, but they’re on top of it because they get the one-line summary or the dashboard or the widget. That’s helpful to me, particularly when you have to deal with RVR know. As a business owner, your greatest asset that you offer to the business is your knowledge and experience and the ability to deal with the unknown. And you can’t delegate that bit. I’ve seen many business owners get into much trouble trying to delegate the parties they can only do. And that’s like the flip side. So once again, setting up effective systems and effective controls give you the confidence to delegate that, that workflow and those work, that workflow, not only that, but it gives you time back to think about your business and how you’re going to grow your business. So I hope this has been helpful if you’re interested in discussing this further; you know how to find me on the links on this page, but overall have a great day.