If you are a business owner, one of the things you need to pay great attention to while building your business is the structure of your business. There are so many debates out there on when is the right time to begin to pay attention to work on structuring a business. Many argue for structuring a business right from the start, and some others argue for structuring a business when the business has hit a certain threshold in income.
I am one of the many who argue for structuring your business right from the moment you decide to venture into it. This is because I believe a structured business from the start is more productive and has greater chances of scaling easily than an unstructured business. Now, if peradventure you started off your business with a structure, now is a great time to consider structuring your business, irrespective of the volume of sales your business is doing.
Understandably, at the beginning of your business, just like with every new venture, you may not have had many problems as a result of the lack of structure but it is only a matter of time before the problems start trickling in unless you work on it now.
What Does Business Structure Mean?
To structure your business simply refers to you creating a well-defined and organized system of operations and administration. Structuring your business also refers to the legal framework in which your business operates.
Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.
When we speak of structuring your business, I need you to understand that it goes beyond just having fanciful titles for members of your staff. This is because titles don’t get work done. Rather we are referring to the orderly process through which all necessary business operations are carried out in your business.
These necessary business operations could defer slightly, depending on the kind or type of business you are running and also the model you have adopted for the business. For instance, a Limited Liability Company has a different process of setup to a sole proprietorship and as such will require a structure different in some ways from that of the sole proprietorship.
Why Do You Need To Structure Your Business
The following are some of the reasons why you need to structure your business today.
Helps In Defining And Streamlining Business Operations
Streamlining of business operations simply refers to the process of simplifying or eliminating unnecessary business operations or tasks, thereby improving the efficiency of all other business operations or processes.
Structuring your business will help you in defining and streamlining all your various business operations, helping you identify and focus on those operations that are necessary for the success of your business. This will help create orderliness in your business operation as you are able to clearly define what business operation is important in your business, how to go about it, how much time and resources it takes and who among your staff to put in charge of it.
All we are doing is looking at the timeline from the moment a customer gives us an order to the point we collect the cash. And we are reducing that timeline in the value stream by removing non value-added wastes.
– Taiichi Ohno(Japanese Engineer and Father of Toyota Production System)
Saves Time, Resources And Increases Productivity
Putting structure to your business goes a long way in saving you time and other useful resources such as money thereby increasing the productivity of your business. You are able to define the necessary processes for successfully conducting your business, and allocate these resources and time accordingly. Also, you are able to designate each operation(s) to a member of your staff.
In addition, putting structure into your business helps in speeding up the decision-making process within your business.
Increases Customer Satisfaction
Customers want good service delivery for their money. More importantly, customers want to be served quickly and of course, without compromise to efficiency. This can only be possible when you have clearly built a structure into your business. Structure helps your customer experience as you are able to effectively take your customer from one operation process to the other in an orderly manner. This leaves your customers satisfied with you and a satisfied customer equals a retained customer and a business ambassador/referral.
Helps Business Growth
With a clear structure in place in your business, your business is more likely to grow and scale faster than when you have no structure in place. This is because a structure helps you with your business planning and forecast.
Closing Thoughts On Business Structure
The benefits of structuring your business can not be fully enumerated. This is because, with the right structure in place, your business will benefit in many ways, not just in sales and profits.
If you would like to learn how to structure your business the right way, I strongly recommend this course from Mapemond Business Academy which will help you learn how to implement an effective structure to your business. Click here to view the course now.