How to put your business in order

A company manager at work. Review systems and procedures to ensure that they support optimum performance. FOTOSEARCH 

By CATHY MPUTHIA

In Summary

• Do not waste resources on activities and structures that don’t add value to your core business.

Many ventures waste a lot of resources, including time, on activities and structures that do not add value to their core business.

Some businesses have departments that are defunct and end up wasting a lot of money trying to keep such departments alive.

The end result is that profitability is reduced. As the new year begins, it is important to let go of sideshows so as to save on resources and grow the business.

Simplify operations, systems and procedures

A lot of time is wasted on bureaucratic operations. Review systems and procedures to ensure that they support optimum performance.

Some systems and procedures are bottlenecks to performance. Others are tedious and expensive to maintain yet they don’t add value to the business. Hire an expert to review your systems and procedures.

Simplify your organisational structure

Some businesses have organisational structures that are complicated and difficult to comprehend. It is not clear what the reporting structure is and who is in charge of what.

Often, there is duplication of roles leading to discontent among staff members. In one case a business had a “principal officer” and a “chief officer.”

There was a dispute between the two over who was in charge of a certain project. The reporting mechanism was also not clear as each officer claimed the other should report to them.

The problem was really lack of a sound organisational structure. An organisational structure should be simple to understand.

The HR policy should clarify what role each office performs to avoid duplication. It is also time to do away with unnecessary offices and titles. Many large businesses waste money on useless offices.

Simplify your legal documentation

Review the legal documentation used by your business to ensure they are up to date and simple to understand

A long tedious contract is not necessarily the best one. A good contract is simple to understand yet captures intentions of both parties effectively. Businesses, especially those that provide a lot of contract documentation for their customers, should simplify them.

Avoid unnecessary disputes

It would be prudent for businesses to avoid unnecessary disputes this year. Some businesses waste a lot of time and money litigating over petty issues. Others waste money on legal fees by refusing to settle claims and instead taking the matter to court.

Suing is an expensive process that involves paying legal and other fees. Choose and weigh your litigation wisely.

Sometimes mediation can work where you are aggrieved. Therefore, have a mechanism of deciding which cases should go to court and which ones to let go.

Also, have a mechanism of settling claims where you are the offender. If your opponent has a good chance of winning a case just settle the claim instead of going through court.

This year, resolve to avoid sideshows and keep things simple. Do not forget the main goals of the business.

Mputhia is a partner with Muthoga Gaturu. cmputhia@mgmail.co.ke. www.mgadvocates.com