Is Your Small Business Infrastructure Solid?

Every small business owner should take these key steps to determine if their business infrastructure is solid or needs revamping.


Photo: Dana Sellers, Founder of Gray Capital Solutions; Source: Courtesy Photo
Photo: Dana Sellers, Founder of Gray Capital Solutions; Source: Courtesy Photo

As a small business consultant, I am surprised time and again by how many entrepreneurs have no idea what “infrastructure development” is, or how it pertains to their business.

To start, infrastructure is defined as the basic physical and organizational structures and facilities needed for the operation of a society or enterprise. When applied to your business, infrastructure represents the components that help your business operate and succeed. Whether your infrastructure is sound and effectively designed, is another story.

So, let’s review key steps every small business owner should take to determine if their business infrastructure is solid or needs revamping.

 

  1. Revisit your foundation.

    Every small business owner should revisit their business plan often. But first, “do you even have a business plan?” I know, very well, more than a few businesses have never created a business plan and they may operate just fine without it.

    Yet, failing to plan is planning to fail. Just ask the infamous pastry shop Just Baked, a cupcake shop and bakery forced to close all but four of its stores. “The product tasted so good it muscled through the bad times. But, we over-expanded. We just opened too many stores,” says Todd Turkin, who co-founded the company with his wife, Pam. It’s a far cry from making headlines in 2013 as Inc. Magazine 1,011th fastest growing private company in America with three year growth of 426%.

    It’s also a cautionary tale for entrepreneurs who think they don’t need a plan. Just as every house is built on a solid foundation, so should your business. A business plan is the foundation your business is built on and when prepared correctly it can help you develop goals and recognize blind spots sooner than later. Without planning, it is impossible to accurately measure success, failure, growth, or setbacks.

  2. Develop communication priorities.

    All small businesses want big business sales and profits, because it shows growth. But the first step is to operate your small business as if it were already a big business. Identify operational areas and imagine each as a separate department managed by someone other than yourself.

    Next, ask yourself: “How are these departments communicating with one another, and are they collectively working towards the same goals (i.e., the goals in your business plan)?”

    Here’s an example of poor communication: You sell high-end merchandise at a discounted price. Since your pricing strategy is working, sales are improving. However, at the end of the month you realize net profit is not what you expected.

    What happened? Your finance department didn’t effectively communicate revenue goals to the marketing and sales department. Marketing and sales did their job, but gave too much of a discount and overhead was too high to turn a solid profit. A solid business infrastructure relies heavily on process and communication.

    In the real world, many small businesses are microbusinesses with less than five people. “Nine out of every ten firms in the United States is a microbusiness,” according to the SBA. This means you have your hand in some, if not all of the departments of your business! And the reality is, many small business owners launch initiatives without consulting other departments—even though we’re running them.

  3. Consistency is key.

    Once your communication is refined, next is consistency. Consistently implement a process or system for a period of at least 6 months to gauge how well it works. You can change an unnecessary step in the process, but the core should be consistent.

    This will help you become proactive instead of reactive. Consistency provides time to track data, measure results, and make better decisions. The average business owner changes processes, pricing, and plans with the wind in an effort to improve sales. However, changes should always make sense and align with your business plan.

    Give the pot more time to boil. Don’t jump ship when you, your process, or plan doesn’t immediately present anticipated results. Change and innovation are great, but don’t change your core every 30 days.

Remember, empires are not built in a day.

With that being said, if you’re running a business, you have infrastructure. But, how well your infrastructure operates and whether it’s reliant on a shaky foundation is up to you. Take time to review your foundation, processes, and overall infrastructure. Your business and customers will only thank you for being better.

 

This article has been edited and condensed.

Dana Sellers is the Founder and CEO of Gray Capital Solutions, a consulting firm focused on the growth and development of startups and small businesses. Connect with @graycapsolns on Twitter.

In this article