Have you recently started your entrepreneurial journey? Many entrepreneurs are a little nervous when they go out on their own and try to put certain procedures in place to keep them on the right track and eliminate as much of the unknown as possible. While this desire for structure comes from a good place, it can often derail a business if the owner blindly sticks to it. Being married to certain procedures indicates rigidity and can be the equivalent of putting blinders on. Here’s why entrepreneurs should instead focus on outcomes when deciding which procedures to stick with—and which to ditch.
Why Entrepreneurs Use Procedures
As mentioned above, many entrepreneurs use procedures to keep them on track and prevent errors when they become their own bosses. They believe that sticking to procedures will keep them from being overwhelmed with all their new tasks. While this is true to a point, becoming a slave to procedures eliminates much of the freedom that is inherent in being an entrepreneur. One of the reasons you likely decided to work for yourself was so you could break away from rigid thinking and activities. Now, that doesn’t mean you should ditch all procedures. Some have their place—but you need to identify which are actually delivering results.
Where Procedures Come From
Many entrepreneurs simply carry over procedures from the big businesses they worked for prior to going independent. This is a classic case of simply doing what you know to keep some sort of consistency in a new environment. Unfortunately, the procedures that work for big business don’t often translate well to smaller enterprises. To make matters worse, some procedures at big businesses never really worked in the first place—they were simply a product of outdated thinking that was never updated.
For those who didn’t simply carry over procedures from their previous jobs, procedures are often picked up by reading books about productivity or customer service or by mimicking something they’ve seen other business owners do. Examples of these are ineffective marketing techniques, outdated CRM or lead-generating procedures, and time-consuming administrative tasks.
To discover which procedures to keep and which to get rid of, you must stop focusing on the procedure itself and instead focus on the outcome. Which outcome do I mean? The one that really matters: profit. Some procedures will accomplish a few goals, such as attracting new clients, getting items ticked off the to-do list or increasing revenue. However, until you identify how they are impacting the bottom line, you can’t identify the true outcome.
As the self-proclaimed Profits Prophet, the gospel that I preach to every entrepreneur I work with is that every action in their business needs to lead to greater profits. Some procedures may be drawing in new clients or adding to revenues, but their cost (either in time or actual monetary expense) is so high that they either don’t increase profits or actively decrease them. These are the procedures that need to go in favor of those that boost your bottom line and lead to the growth of your business.
Need help identifying which of your procedures are adding to your success and which are holding you back? I’d be more than happy to work with you one on one or welcome you to take part in my Finance for Entrepreneurs course.