Policies & Procedures fuel profits....#49
- Adrian Dionisio - business737 owner
- Dec 23, 2021
- 4 min read
Updated: May 23, 2024
Implementing policies & procedures is one of easiest ways to boost business profits. Without policies and procedures your business can never maximise on all the opportunities that arise.
Are your fundamental business processes predictable?
Have policies and procedures been established throughout your business?
Are there defined systems for your most lucrative business processes?
This article will discuss all the benefits of implementing policies and procedures into your business.
Why have policies and procedures?
Policies and procedures are key to running a successful and profitable business;
Policies and procedures provide a guide to conduct day-to-day operations.
The make a business better organised and more profitable
They give guidance for decision-making
They help streamline internal processes.
They bring uniformity to operations.
They reduce the risk of unwanted events.
They promote consistency across the business for both employees and customers.
They encourage employees to behave in certain ways.
They help businesses achieve their objectives more efficiently.
They hold employees accountable
They help build a strong culture
They clarify expectations
Build a healthy reputation of your business
Demonstrates the competency of a business
They ensure compliance with laws and regulations.
Research shows that implementing effective policies and procedures will increase productivity by approximately 20%. Increased productivity means increased revenue and profits.
Don't kid yourself. Creating policies and procedures is hard work. It takes time. They need continuous adjustment over time. They need to be monitored and tested for effectiveness. Improvements can always be made.
As a business it is prudent to gauge what types of policies and procedures fit your company culture.
Policy VS Procedures
A policy is a predetermined course of action. It provides guidelines for business strategies and objectives. It links vision, values and day-to-day operations. Policies identify key activities and provides a guide on how to handle issues as they arise.
A procedure is a road map that explains a specific action plan for carrying out a policy. They eliminate common misunderstandings by identifying job responsibilities and establish boundaries for those jobs.
Policies and procedure go hand in hand and have great synergy. Together they help
Increase compliance
Improve business processes
Enable consistency
Help navigate incidents and crises
Policy and Procedure Examples
Policies and procedures can be established for things such as;
Relationship building
Marketing ethos
Enforcing upsell, cross-sell and downsell strategies
Reactivating former customers
Drip campaigns (to ensure it is working and effective)
Cost cutting
Digital marketing initiatives
Sales processes
Division of Duties
Dealing with objections
Follow up
Post-sale reassurance
Problem solving
Measuring activities
Client call format
Typically little or no cost is involved when implementing policies and procedures. They will cement long-term growth for your business and allow you to run it like a true professional. Monitor the metrics so you know they are effective, and take steps for improvement where necessary.
This is still applicable if you have a small team or are a solopreneur
Set rules for you to abide by, some point of reference to go back to throughout your journey. Policies and procedures are created from the experience of those who perform job tasks and record the work methods. These procedures should be reviewed regularly and be updated to incorporate lessons learned and best practices to ensure product and service quality.
Employees
Policies and procedures help employees understand the correct work processes. This will help to ensure that the service or product maintains high quality.
Policies and procedures provide a guide for meeting objectives. They describe the steps that employees are to take when creating a product or delivering a service.
Establish expectations for behaviour and productivity.
Establish an approach to dealing with work processes.
Articulate the required steps to perform job tasks or provide a service to a customer.
Let's look at the example of a waiter who serves in a restaurant. The procedure for delivering the service might be:
Waiter introduces themselves;
Smiles and makes eye contact with the customer;
Explains the most popular menu items;
Ensures all drinks are topped off when half filled;
Ensures food quality meets the customer’s expectations.
Detailing the procedure for delivering great service to customers is what contributes to a great service environment.
When procedures are followed, there is consistency in practice for work processes. This consistency helps to ensure that things are done the same way, every time, and that all of the procedural steps are followed.
When steps get skipped it creates an inconsistent process that then creates variations in product or service quality.
Having a written policy and procedure manual can be used as a tool to help train employees and serves as a reminder of procedure steps and expectations.
Create a process to review/refresh policies with employees.
Framework for Process Improvement
Schedule regular reviews of policies and procedures. Question what is working and what could be improved. Take what you learned and improve internal processes for how work gets done.
Consider feedback from employees and customers and create improvement plans to address issues and concerns of those valuable external and internal customers.
Other Things to Remember:
As a business grows it is important to put those things in writing that the business values and deems important.
Policies and procedures need to be reviewed and updated to make improvements and keep them current.
Employees need initial training on procedures but should have continuous refreshers to inform them of changes in practice and to remind them of expectations for following procedures.
Policies and procedures should be consistently reviewed for its effectiveness and to ensure that what is being done in practice is adding value.
Most procedures should have checklists that simplify the process and serve as a reminder.
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