Creating systems to support businesses’ growth

This entry is part 2 of 5 in the series Business Coaching

Contractors know plans, our companies thrive or die by them. Why should your company be any different?

 

Before you can even begin to break down how to create systems for growth, it’s a good idea to take a step back and look at what your complete and functioning business system will look like once it’s fully built, even if you do not have the resources like time, energy, or money to make them work at the same time.

 

The first segment of a business system is knowing your business model. “A business model describes the rationale for how an organization creates, delivers, and captures value.”

 

One of the best visual tools for creating a solid business model is the Business Model Canvas. It describes 9 building blocks for creating a successful business model:

 

  1. Customer Segment: who are you serving? What do they need? There are different types of customer segments that need to be engaged in different ways. 
  2. Value Proposition: what value do you provide to the customer segment you are serving?
  3. Value Channels: value is delivered to customers through communication, distribution and sales channels. Which will you implement to deliver value to your customers?
  4. Customer Relationships: how do you plan on maintaining and nurturing those relationships?
  5. Revenue Streams: revenue streams are the RESULT of the value propositions that have been successfully delivered through your value channels
  6. Key Resources: what assets do you need to deliver your products or services through your value channels?
  7. Key Activities: what are the highest impact activities that deliver the most value to your clients?
  8. Key Partnerships: who are your key partners to deliver value to your clients? These can be internal and some can be found outside your company. 
  9. Cost Structure: what are the costs you incur to operate your business?

 

I’d love to spend the rest of this post discussing your business model because it really is that important. But you can also just get the book or watch a YouTube video where Alex Osterwalder talks about it.

 

So why this topic?

 

Because each of these segments is important to the functionality of any business, even if they are minimal. Each of these segments requires a system, especially on a large scale.

 

If it’s just you, your phone, and your truck/van driving around City, you are probably creating systems without even realizing it. It gets more difficult when you hire someone and try to teach them how you do things.

 

So what to do?

 

Decide what value you want to bring to the market. Construction in New York is a very crowded market, but few are truly successful. If you want to build a viable and scalable business, you need to know who your customers are and what value you offer them. Some businesses thrive by providing a small amount of value to many, while others focus on providing a large amount of value to only a few.

 

If you plan to tile the bathrooms in a high-rise building, you have over 40 floors and about 450 bathrooms. The way you add value is very different from a contractor working on high-end residential projects. The same contractor can do both, but the internal systems he uses will be quite different.

 

Once you know what value you are delivering, it’s pretty easy to develop the business model that’s right for your company.

 

“If you can not describe what you do as a process, you do not know what you do.”
– E. Edwards Deming.

 

A system is a process made explicit, repeatable and often documented, either in writing or as a diagram (like the Business Model Canvas). The main benefit of creating a system is that you can review the process and make improvements. By putting each step in writing, you can see how the core processes work (or do not), how they are structured, how they affect other processes and systems in other areas mentioned above, and how you can improve them over time.

 

Systems ALSO can help teams of employees get on the same page. Relationships and communication are the cornerstones of construction. If you are clear about how the different areas of your business work together to provide value to contractors, construction managers or developers, and have a tool to explain how these systems work, you can be sure that communication …

 

Developing systems and clear processes for events and tasks can help everyone do what needs to be done without wasting time or misunderstanding. After you develop systems, you can decide which parts can be automated, but that’s a topic for another day.

 

Remember that there are some drawbacks to relying too much on systems. You need people to make solid decisions when things go wrong. But (again) if they understand how they affect other systems when they decide something is out of whack, they are more likely to communicate the impact of that deviation to those who are affected.

 

Can implementing systems be overwhelming for you?

 

It’s stressful enough trying to navigate the construction industry in New York City. Working on your own? Needless to say and/or explain how that can make your journey that much more difficult.

 

By relying on the help, guidance and advice of a network of professionals who have expertise in a variety of fields and focus on the construction industry, you can take the pressure off yourself and pave the way to achieving your goals and scaling your projects.

 

Help us help you! Schedule a meeting with us and let’s chat about ways we can help you build a business that’s ready to grow. 

Author

  • Vivian Mandala is the founder of CMC Network and has worked in NY Construction for over 20 years, most of which was as a Contractor. She is now a Construction Business Coach. In 2017 Vivian, along with a group of dedicated Contractors, CM’s, GCs and Developers, started CMC Workforce, a long term in depth construction training program. Vivian enjoys the personal connections she makes through her coaching and seeing the lasting changes that she sees her clients benefit from year after year.

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