Turnkey Business Operations : How to Create Them
Do you own a business or have you just created a really challenging job for yourself? Until the day you can walk out of the business, and it keeps operating in your absence, you don't have a business you have a job. A "turnkey" business is one that can operate like a well-oiled machine, and operate independently. The concept of having a "turnkey" business isn't new and there are a myriad of books written about the subject. Still many business owners either consider it "consultant speak" or such an elusive goal that they give up aspiring to it.
If you like the idea of turnkey operations, but not sure how to get it, then the answer is now at your fingertips. Turnkey status is not achieved overnight. It is the result of how you conduct business on a day-to-day basis and the incremental improvements you make. You don't need to suddenly find an extra day a week to get to you goal. Instead aim for gradual improvement. A little twigging here and there adds up over time to a great result.
What's the current turnkey status of your business?
There are 8 areas of your business you need to review to determine how far you have progressed toward a turnkey business. The 8 areas are listed below with some examples of the attributes each area should have. Consider what is going on in your business in each of these areas.
1. Financial Management
- Financial targets and budgets have been set and are used as a management tool
- Financial reports are accurate and easy to access
2. Customer Satisfaction
- Customer research is conducted regularly and used to improve products and services
- Everyone in the business is clear about what they need to do to deliver value to customers and is committed to doing that
3. Lead Generation and Conversion
- There is an effective and clear system for generating and converting leads
- You know your conversion ratios
- Roles & responsibilities have been clearly defined and documented
- Performance reviews are conducted regularly
- There is regular communication with your team about business performance and direction
- Business strategy is documented and well understood by everyone in the business
- Workflows are documented and utilised
- Team members are invited to contribute ideas for process improvement
- People can readily access the information they need to do their job well
- Technology is reliable and people have the right hardware and software to do their job
- Relationships with suppliers are healthy and have been formalised
- Facilities (offices, factory etc) enable people to be productive
Are the gaps a problem?
Most businesses will have strengths and weaknesses in relation to each of these areas. The more important question is do the weaknesses negatively impact on the business? No business is perfect, nor does your business need to be perfect to be successful. However, you might want to consider the following questions to determine if you need to put more focused effort on improving the turnkey status of the business.
- Do you want to sell the business? To maximise your sale price you should aim to have full turnkey status
- Do the gaps inhibit your ability to achieve business goals? Maybe the gaps are affecting productivity or your ability to convert sales, therefore they need to be addressed.
- Are the gaps a risk to your business? If you leave some gaps, such as financial management, unaddressed then it could cause your business to fall over.
Prioritise the gaps you want to address in the short, medium and long term then look at those gaps you want to starting addressing straight away. What are some simple changes you can start making on a daily basis that will bring about that change? We have been through this analysis with nearly all of our clients and there are always options for small changes that can be made. It's the small changes that add up over time to create a turnkey business.
You might also like to read:
Business Management: Research shows Owner-Operators must undo the business shackles!
New data has confirmed what we have all suspected for some time. Business Owner-Operators are shackled to their business, are working more hours than most workers and neglecting their own happine..Read More