What are business processes?

You can think about your business in many different ways. For example, you can examine it with a SWOT analysis – looking at its strengths, weaknesses, opportunities and threats.

Another approach you can take is to use a financial perspective, and go through your books and look at your income and expenditure to work out where the money is coming from (and going).

Business process improvement – the approach I use – looks at your business as a collection of processes.

But what is a process?

The definition

A business process is defined as follows. It:

  • Has a number of activities that are performed in some order
  • Creates something which has value – such as a product for your customer or the invoice you send them

Some business processes are carried out frequently – such as creating and sending out invoices. Others – such as filling out your tax return – less so.

Some business processes are always carried out in exactly the same way each time they occur to create exactly the same outcome. For example, the process a screen printer uses to screen print one of a number of identical T-shirts.

Others processes are less rigid. For example, designing a website, writing a piece of copy or creating a graphic design have a lot more flexibility in the ways they are carried out.

The two common processes

Two common processes that you tend to find in all business are:

  • The production process
  • The financial process

The production process is the series of tasks through which clients are found and products or services are produced for them. It includes such tasks as:

  • Generating leads
  • Converting leads into sales
  • Obtaining a brief
  • Creating the product
  • Delivering it to the client

The financial process deals with the flow of money through your business. It has tasks such as:

  • Creating a quote
  • Keeping track of expenditure
  • Sending an invoice
  • Receiving payment
  • Sending off tax returns and BAS statements

Of course, these process descriptions are very generalised. But they are a good start to understanding how work and money flows through your business.

And as I was saying, business process improvement looks at your business as a collection of processes. And once processes have been identified, it then works out ways to improve them – and in doing so improves your business.

What about you? What processes does your business contain?

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2 Comments

  1. Keith

    Too academic David.

    You need more examples: For example: “Once you set up a process that is to be used sporadically, make sure you know where to find the “instructions” again. You could spend as much time looking for it next time as you did creating it in the first place.”

    Also (this is really avant garde) at work we have put all the OHS instructions for dangerous processes on an App. For instance, to cut a pipe with an electric saw, you can view the correct way to do it on an I-Pad or such-like

    • Thanks for the feedback.

      You’d be surprised how many people benefit from just getting the idea of what a process is.

      The app you’re describing is really good example of a knowledge management system. Very few small businesses have the in-house skills and resources to create such a system, but the value that they give to a business is undeniable. For these people, I tend to recommend a cheaper and easier alternative, such as Evernote.

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