A successful business uses patterns, models, methods, and principles to achieve success. Forming these patterns isn’t always easy or straight-forward, such patterns can sometimes take decades to accurately define.
An organized and efficient business is what every business owner strives for, but few succeed at conquering such a large & general scope of work.
Businesses can still be profitable without following patterns or developing models, which is why leaning-out your business can be so difficult. Unfortunately until a business starts organizing, there will always be a growth ceiling preventing ultimate success.
Adopting strong processes can result in staggering growth, great discoveries, and a more effective business, no matter how big or small.
If you are new to mapping out models and patterns, lets start with defining the core pieces of your venture.
What is a Business Model?
In general terms, a business model defines how your business functions.
“A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.”
-Wikipedia
Discovery
Phase
- Identify Pain Points
- Define A Model
A business model is the core logic by which the company creates, delivers and captures value. Model’s define exactly how a business functions, along with how it generates revenue.
- Architect An Operating Pattern
An Operating Pattern defines reproducible steps to solve the identified pain points from an internal perspective. What operations need to take place to fulfill our business model? Can these operations be abstracted into a simple, repeatable pattern?
- Create An Ecosystem
Operating with consistency is important for all stages of a business. Making time-effective choices and patterns that the business can reuse will impact the output of your operation tremendously.
In order to have successful patterns and procedures in place, it is extremely important to keep accurate and up-to-date documentation. Any process you may need to delegate or repeat over time is a great candidate for being documented to ensure quality/consistency.
Strong documentation leads to effective delegation, which results in consistency over time.
Every business should strive for consistency.
Reducer Pattern
- Waiting
- Motion
- Defects
- Inventory
Whether in the form of raw materials, work-in-progress (WIP), or finished goods, inventory represents a capital outlay that cannot yet produce income. The longer a product sits in one of these states, the more it contributes to waste. The smooth, continuous flow of work through each process ensures excess amounts of inventory are minimized.
- Over-Production
- Documentation
Toyota is famous for its waste reduction process, known as the 3M Model.
- Muda – Waste
- Mura – Unevenness or Variation
- Muri – Overburden
“Muda is a Japanese word meaning: futility; uselessness; wastefulness
and is a key concept in lean process thinking, like the Toyota Production System (TPS) as one of the three types of deviation from optimal allocation of resources (the others being mura and muri). Waste reduction is an effective way to increase profitability.
From an end-customer’s point of view, value-added work is any activity that produces goods or provides a service for which a customer is willing to pay; muda is any constraint or impediment that causes waste to occur.”
– Wikipedia
In order to have successful patterns and procedures in place, it is extremely important to keep accurate and up-to-date documentation. Strong documentation leads to effective delegation, which results in consistency over time. Every business should strive for consistency.
Operating with consistency is important for all stages of a business, but especially true as a start-up. Making time-effective choices and patterns that the business can reuse will impact the output of your business tremendously.
Reusability enables your business to effectively optimize output, managing your “waste” strategically can change the workload and effectiveness of your partners/employees.
