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What Are Business Operations and How to Define Yours

5 min read • Aug 05, 2021 • Derek Miller

Business operations refers to the processes you put in place to run your company. From the development of your products to their marketing and sales, your teams use operations to execute ideas. 

There are 2 key parts of business operations: process development and optimization. When a business first forms, teams will focus on operations development, which addresses who does what within the company. Then, as the company grows, teams will optimize the operations processes to save money and grow sales. 

Your business operations have a big impact on your business. Learn more about this aspect of your company and how to improve it over time. 

Why Are Processes Important?

Processes are a key aspect of your business operations. Anything that needs to get done in your company follows a set process. Your processes range from making key deliveries to establishing office best practices. There are multiple reasons why you need to develop clear processes—and why these processes need to documented. 

  1. Processes allow for standardization. When everyone does the same thing the same way, you and your customers will always know what to expect.
  2. Processes prevent burnout. Your team members can know what is expected of them and won’t feel pressured to take on tasks outside of their set roles.   
  3. Processes can streamline your onboarding. New team members can quickly learn their roles and requirements by following existing processes. 
  4. Processes promote fairness. This way, one team member doesn’t follow a set of rules while other employees ignore them. 
  5. Processes create opportunities for improvement. Rules are meant to be broken and improved upon. Once you have a process in place, you can start optimizing it. 

For example, say a startup e-commerce retailer wants to create a weekly newsletter with items that are on sale. However, without a clear process, there are no guidelines for which items are promoted and which ones aren’t.

There isn’t a template for sending out the newsletter, so creating it is time-consuming—and if an employee sends out the newsletter and quits before documenting the process, no one knows how to keep it running. There never was a clear process, so a potential revenue driver is forgotten or ignored.

What Happens During Business Optimization?

The first year of your business is often spent on process development. You want to add a new feature to your company, so you create a process to grow your business operations. However, as your company grows, you may want to change these processes through optimization. In large companies, there are entire departments dedicated to optimizing business operations. 

During the optimization process, teams review business processes to see how they can be improved. These employees are looking for ways to save time, money, and energy while also looking to reduce risk

For example, Amazon’s site speed plays a significant role in its revenue. If the website slows by even 100 milliseconds, sales will drop by 1%. When Google’s pages take an extra half-second to load, search traffic drops 20%. By keeping the business operations for Amazon and Google running at their best, the 2 companies can keep customers happy and increase sales. 

There are multiple reasons why a company will look at a specific process to improve business operations. However, one of the most common reasons is that something isn’t working: 

  • A process that should take a few hours is taking weeks. 
  • A system that is meant to help customers is frustrating them. 
  • Employees are making more mistakes or experiencing injuries after a new tool is introduced.

All of these factors alert operations managers that something is wrong. By intervening to address weaknesses in the systems, managers can improve business operations to help employees—and the company’s bottom line. 

How Can You Audit Your Business Operations? 

There are multiple ways to audit your business operations—and multiple reasons to do so. Some managers start with a full business operations audit whenever they are hired to a new company or department. They want to know how everything works and what can be improved. Other leaders conduct operational audits when developing their annual budgets or when an employee leaves. 

Follow these steps to audit your business operations: 

  1. Make a list of key processes within the organization. Each employee can make a note of their specific processes. 
  2. Talk to employees about how processes are completed. Focus on how long each process takes and the number of people who are involved. 
  3. Ask for feedback on these processes. Do your employees have any ideas for how they can be improved? What might help them to complete their work faster—or better?   
  4. Remove steps or change how processes are done. Clearly create instructions documenting the new processes and ask your employees to follow them. 
  5. Track the progress of the new processes. Make sure they make sense and aren’t affecting your team members or other operations methods in any way. 

These steps may seem simple in theory, but they’re more complicated in practice. While 1 change might benefit the company and help you save money, it could also hurt your brand or employee morale in multiple ways. 

For example, to save time, a company might cancel its weekly team meetings and opt for an internal email instead. This might seem like it saves an hour; however, it could cost team members in other ways.

One employee might lose 2–3 hours collecting updates from managers and sending out that email. Other employees might ignore the email and miss important messages that they would hear in an in-person meeting. As a result, business operations suffer even though the change was designed to improve them. 

You Constantly Need to Improve Your Business Operations 

There will always be room to improve your business operations. New tools can help you to automate processes or save employees’ time. Your staff can keep coming up with ideas that improve their workflow.

However, if you’re dedicated to understanding your processes thoroughly and finding ways to do them better, you can stay involved in your operations—and lead your company toward growth. 

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Derek Miller

Derek Miller is the CMO of Smack Apparel, the content guru at Great.com, the co-founder of Lofty Llama, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy, Score.org, and StartupCamp.