10 Key Reasons Why a Business Process is Critical for a Startup
Post Summary for Business Process for Startups
As a startup CEO, you’re probably working in excess of 70+ hours a week, often waking at 6 a.m. and not finishing until late in the evening. Wouldn’t it be great to put order on the chaos and hit your revenue targets? With that said, I’m going to explain why processes are critical to revenue and your peace of mind.
A business process is a collection of linked tasks to deliver an activity, service or product, either to an internal or external customer. Business processes are a crucial part of business, and even more during the startup phase. Here are 10 reasons why:
1. Increasing Inbound Sales Conversion Rate
Do you map out your marketing and sales processes? You may often find that your company is failing to convert inbound traffic, despite the best efforts of your marketing team to drive visitors to your website. This is because the handshake between marketing and sales has not been agreed with measurable targets. In many organisations, sales and marketing engage in a tempestuous relationship, despite the importance of the two working together.
Example: a customer signs up for a trial or requests a demo. The sales team is slow to respond and may only call the customer a day or two later. What we found in SalesOptimize was that, if you called the customer within 30 mins of a trial signup, the sales lead is warmer and the customer is more ready to engage. However, if you wait for 1-2 days, the sales lead will go cold and the customer is less likely to engage. Here’s an example of a simple inbound sales process:
You will need to run a report from your CRM system or product to track any inbound sales leads which have not been called within 30 mins, 60 mins, 2 hours, and 24 hours.
2. Increasing Team Productivity
Uncertainty kills productivity. When people are uncertain about the tasks they need to do each day, they tend to rely on their email inbox to prioritize their work. Once you map the major processes for each role, your employees will now have a daily/weekly rhythm of work, meaning you can accelerate the acquisition of your first 100-1,000 customers.
3. Onboarding New Hires Quickly
Processes are a great way of training in new hires quickly. Startups tend to comprise of smaller teams, hence critical resources are split between training new hires, and delivering on critical tasks. You might find yourself saying the same thing over and over again. However, if you train the new hire through the critical process for their role and how role interacts with other members of staff, they will get to grips with things more quickly.
4. Releasing Products Faster
In a startup, it’s critical to map the bug fixing and product release schedule. Failure to map these processes will mean that bugs are not always fixed based on criticality to customer acquisition or revenue. Often, new features are based on a wish list by the sales and management team. But imagine a process that has the decision making criteria defined, and a scoring mechanism for prioritizing bugs and feature releases…
5. Improving Revenue Collection
Have you agreed on the billing cycle? Is it adhoc, daily, weekly or monthly? Do you need to get a purchase order from your customer? I’m always amazed by the number of enterprise companies that forget to issue this. It results in a cancellation of the old invoice, and having to issue a new one. Have you agreed on the credit and collection terms? Is it payment up-front, or 30 days+? Here are some of the activities you should consider when setting up the billing and collection process:
6. Improving Staff Happiness
Have you agreed on how and when your team should submit expenses and holidays for approval? This can be an unnecessary pain point, especially as you grow. You will need to agree a time in the month, what format, and to whom the expense form is sent. Here is an example of an expense request process. You need to agree the threshold that requires manager vs CEO approval.
In addition, you will need to agree the holiday form tracker and what happens with unused days. This is a very simple process to create. Here’s an example of our holiday tracker:
7. Improving Customer Onboarding
Usually in a startup, the sales team provides all of the onboarding support in the early months. However as the business grows, you are likely to hire an Account Manager or Customer Service person. I recommend documenting the customer onboarding process and explain the tasks that the sales team must complete to finish a sale, and also the point at which a customer service/account management takes over. This will help to improve the onboarding of new customers, increase customer satisfaction, and reduce churn. Whilst documenting the onboarding process, you are likely to find tasks that can be automated and thereby shorting the onboarding cycle.
8. Improving Visibility and Customer Satisfaction Rating
How is customer feedback captured? How are the top questions analyzed? What is the speed of response? Is your first resolution rate high? When in a startup, you are likely to be managing customer service via your inbox. Consider documenting this process and agree on key KPIs. There are some very good tools available to automate and improve visibility of your customer service process. Here’s an example of some:You can check out more on these here
9. Improving Partnership Engagement
Do you have strategic partners that are critical to your revenue and your market share goals? If the answer is yes, do you know which partners by market will drive most of your success? Do you have an onboarding process by which you review and weigh up each partner? Do you have a legal process map to review partnership agreements and IP assignment? Have you agreed on revenue share with the partners? Are you both aligned on legal definitions, calculation methods, and when revenue should be paid? There are a lot of tasks associated with partnerships that, if not properly documented and managed, can leave money on the table that will drive up costs, and in the worst case scenario, end up in court.
10. Scaling Your Organisation For Growth
Large organizations invest heavily in process management. I am a six sigma black belt and I worked in Microsoft, Paypal, IBM and Telefonica where process management was used to create agile organizations that saved both costs, drive revenue, increase customer satisfaction, and allowed these organizations to scale for growth. Here are some process management tools that you could consider using. I personally use IBM BlueWorks due to the simplicity and ease of use, but there are many other equally good tools to use. Here are some examples:
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Process management requires time and effort, but it’s incredibility worthwhile. When I started in process management, I was skeptical. This quickly changed as I started to see how processes helped my team and my colleagues. Our product development teams were able to build quality services and products that both delighted and excited our customers.
Is it difficult? No. Just write down a list of tasks in order of priority, and state who should complete which ones. Now draw a line between each task, and you have a process. The next step is to enter these into one of the tools mentioned above. When you have the funds available, consider hiring a process person.
If you want to know more about process management, please give me a shout. I would love to get your thoughts: Liz.Fulham@salesoptimize.com, CEO for SalesOptimize.