your business grows, you will need to build
systems and processes and attempt to automate
as much as you can. Youll need to
build distribution systems, inventory systems,
marketing systems, follow-up systems, customer
support systems, research and development
systems, accounting systems, and hiring
systems, among many others.
the beginning of your business, as you
create each system, write down the details,
as well as any general business rules
and procedures in an employee handbook.
This book will become invaluable as time
progresses. The Employee Handbook for
Broadwick Corporation is currently 38
pages and contains background information
on the company, founders bios, a
listing of officers and the Board of Directors,
a company description, a description of
our main product, product frequently asked
questions, a company timeline, a list
of persons to know, an overview of agreements,
and office procedures and policies including
Phone Usage Policy
Phone Answering Policy
Voice Mail Procedure
Job Responsibilities Policy
Dress Code Policy
Network Usage Policy
Change of Information Policy
Sexual Harassment Policy
Workers Compensation Policy
Adverse Weather Policy
As we grow the business and things change,
we continuously add to the handbook.
remember that investors do not like to
invest in systems where the system goes
home at night. If you can build proper
systems so that your business will operate
properly, whether or not you are there
to oversee it, your business will grow
faster and be much easier to sell. Although
it takes longer to set up the system than
to do it yourself, in the long run you
can save a lot of your time and effort
by setting up the system.
More Than a Handbook
your company from a new business into
an enduring organization creates some
growing pains. Putting in place an Employee
Handbook cant help with all of these.
Youll also need to do payroll, ensure
compliance with HR laws and regulations,
and ensure your books are up to higher
standards. Specific things Ive learned
as being the CEO of a company going from
2 to 9 employees over the past year include:
best to outsource your payroll. Figuring
out State, Social Security, Medicare,
FICA, and Unemployment amounts and making
sure exact payments are made on time
can be quite a hassle if you choose
to do it yourself. We use a company
called Paychex to handle cutting checks
for our employees and paying all applicable
state and federal payroll taxes.
sure to have a procedure for hiring
new employees. All new Broadwick employees
must sign an Employment Agreement, Confidentiality,
Non-Disclosure, and Non-Compete Agreement.
They also receive a Direct Deposit Enrollment
Form, W4, Health Insurance Enrollment
Form, and Employee Handbook.
records relating to personnel and performance
to protect yourself against lawsuits
related to employee termination. Conduct
quarterly evaluations of each employee
yourself until you are large enough
to have a full HR department.
a good accounting firm and establish
an appropriate accounting procedure.
At Broadwick, we keep all of our financial
records and receipts for each month
and then mail them to our accounting
firm at the beginning of the next month.
They input the records into QuickBooks
Professional 2004 and then mail the
files back to us. We get a monthly profit
and loss statement and balance sheet.
The same firm also handles our yearly
Focus on Efficiency
you go from being a small start-up to
an international player in your industry,
youll have to manage the operations
of a number of activities. In all cases,
focus on creating efficiency and optimizing
every operation. The more you can automate
your operations the better.
an example, we can take a look at a recent
client of mine in the nutraceuticals industry.
This client sells various products that
improve health and reduce pain. When I
began working with the client, they were
making a few dozen sales per day through
their web site. When a sale would come
in, they would have their shipping person
type in the customers information
into a label maker, print out postage
on stamps.com, type in the address a second
time, get a box from the closet, construct
the box, find the proper product and put
it in the box, find the proper literature
and put it in the box, manually enter
the address for the third time as well
as the product, description, quantity,
and cost into QuickBooks and print out
an invoice, put the invoice in the box,
tape the box up, apply the stamps.com
postage, and then go to the post office
to mail the package.
they told me everything they did to ready
an order, I was stunned at how inefficient
and wasteful their process was. It took
over 15 minutes to prepare a single orderwhereas
the nutraceuticals company I worked with
in high school was able to complete a
full order in less than 45 seconds on
I consulted with them their system was
much more efficient. Now, instead of typing
in the label they download all the new
order data from their database all at
once and automatically mail-merge all
the labels into a Microsoft Word file.
The fulfillment person simply had to open
Word, start the feed of the labels into
the printer, and hit print. They could
print ten labels in thirty seconds, instead
of spending one minute on each. Next,
I got rid of their need to use stamps.com
for postage. I alerted them that instead,
they could simply set up an account at
their local post office, pay in advance
with a check, and take all their packages
in through the back door each afternoon.
Theyd just drop of the packages,
tell the attendant which account they
were from, and the USPS would handle applying
the exact postage.
knowledge saved another 2 minutes per
package, as the fulfillment person no
longer had to weigh the package, type
in the company and delivery address, and
print and apply the proper postage. The
next thing we optimized was the packaging.
Instead of using a hard to construct box,
I told them about padded self-seal mailers.
They were not only 1/4th the price of
a box, but also required no construction
or tape. Finally, I advised the company
that there was no need to include an invoice
with the product, as the customer received
their invoice via email. This removed
the need to re-enter all the data again
into QuickBooks, print out the invoice,
and put it in the box. This saved a full
four minutes per order. They could now
automatically importing the sales data
into QuickBooks in a batch at the end
of each week. It would take 30 seconds
to import 1000 orders, instead of 30 hours.
optimizing their shipping operations as
such, we saved the company hundreds of
dollars each week and increased the maximum
capability per day from 45 orders to 450
orders. In your own company, there are
likely numerous areas where an efficiency
review would be helpful. See what efficiencies
you can create and how much money you
can save by focusing on automating and
optimizing the operations of your business.
navigate the process of creating systems,
developing an employee handbook, dealing
with payroll and HR, establishing an accounting
process, and focusing on efficiency and
you'll be well on your way to turning
your new business into an enduring company.
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