You bought the business. Now make it better

Buying a business gives you ownership of its customers, employees, assets and cash flow. It also gives you every inefficient process, undocumented workaround and recurring problem that developed under the previous owner

Some of these problems will be obvious. Jobs run late, customers complain or employees spend hours correcting mistakes. Others will be harder to see because the business has learned to operate around them. An employee keeps a private spreadsheet because the main system does not work. A manager approves every purchase because nobody trusts the purchasing process. The team enters the same information three times, but nobody questions it because “that is how we have always done it”

The business still operates, but it requires more time, cost and effort than it should

Operations are only one part of taking over a business. Future editions will cover the financial controls, systems, commercial processes and organizational infrastructure you may also need to build. For this article, I want to focus on the work itself: how the business produces its product, delivers its service and creates value for its customers

One of the areas I have specialized in throughout my consulting career is Lean operations. Lean operations applies principles from Lean, Six Sigma and the Toyota Production System to improve how work gets done

Lean primarily focuses on improving process flow and removing waste. Six Sigma uses data and structured problem-solving to reduce defects and process variation. Together, these methods help a business improve its output, reduce unnecessary work, deliver more consistent quality and create a better experience for the customer

The principles originated largely in manufacturing and remain especially powerful in production environments, where delays, defects, inventory and lost productivity are easier to observe and measure. But the same thinking can be applied to a contractor, repair shop, healthcare practice, professional services firm or almost any other business with repeatable work

I have personally applied these methods across at least five businesses and continue to use them in my current consulting work. I was fortunate to be trained by practitioners who had learned directly from experts in the Toyota Production System

The terminology can sound technical. The underlying idea is not: understand how your business creates value, identify what interferes with that value and systematically make the work better

Tim Cook, who led Apple’s worldwide operations before becoming CEO, described the broader importance of operational innovation:

Operations should not be treated as the administrative machinery behind the business. Done well, they can become a source of better quality, faster delivery, lower cost and competitive advantage

If you have recently acquired a business, these are the five principles I would apply

Lean begins with the customer. Every process in the business should ultimately contribute to something the customer values, whether that is speed, reliability, quality, convenience, safety or a better outcome

The challenge is that businesses often spend significant time and money on activities customers do not notice and would never willingly pay for. Internal reports are produced because they have always been produced. Employees complete approval steps that no longer manage a meaningful risk. Products include features customers rarely use

Before changing the operation, understand why customers choose the business and what they expect it to deliver consistently. This does not mean every activity must directly touch the customer. Payroll, maintenance and quality control may not be visible to them, but they are still necessary to operate the business and deliver the expected outcome

The goal is to distinguish between work that creates customer value, work that is genuinely necessary and work that exists only because nobody has questioned it

If you do not know what the customer values, you cannot know which work to protect and which work to remove

An operating procedure may show how a process is supposed to work. That does not mean employees follow it. The real process often exists across emails, spreadsheets, software systems, informal conversations and knowledge held by a few experienced employees

A simple customer order might pass through sales, scheduling, purchasing, operations, quality and invoicing before the business receives payment. Each handoff creates another opportunity for delay, confusion or error

Choose one important process and follow it from beginning to end. If you operate a service business, this might begin when a customer requests a quote and end when payment is collected. In a manufacturer, it could begin with an order and end when the finished product ships

Document every major step, decision, handoff and period of waiting. Record who owns each step, how long the work takes and how long it waits before moving forward. You may discover that a task requiring three hours of actual work takes two weeks to complete because it spends most of that time waiting for information, approval or capacity

Process time tells you how long the work takes. Lead time tells you how long the customer waits

Once you understand the process, look for the work that consumes resources without creating enough value

Lean identifies recurring forms of waste such as waiting, rework, unnecessary movement, excess inventory, overproduction and underused employee talent. We will examine all eight types of waste and how to find them in the next article

For now, ask where work repeatedly stops, moves backward or requires correction. A contractor may lose hours waiting for materials or site decisions. A professional services firm may repeatedly reformat the same information for different internal audiences. A repair business may keep vehicles waiting because parts were not ordered at the right time

None of these problems may appear serious on its own. Together, they can consume a meaningful share of the company’s capacity and margin

When the business feels overloaded, do not assume the immediate answer is another employee, another machine or another shift. First identify the constraint controlling how quickly the entire process can move. Additional capacity will not solve a process that spends most of its time waiting, accumulating unfinished work or correcting preventable mistakes

Toyota’s Just-in-Time principle describes the desired flow as:

For a small business, this does not require copying Toyota’s production system. It means reducing unnecessary handoffs, balancing workloads and ensuring that people receive the information, materials and decisions they need at the right time

The goal is not to keep every employee or machine as busy as possible. The goal is to move customer value through the business as effectively as possible

Many small businesses depend on experienced employees remembering how work should be done. That approach may function while the team remains small and stable. It becomes a problem when the business grows, an employee leaves or the new owner tries to delegate responsibility

Standardized work defines the best-known way to complete an important recurring task. It should explain the sequence, owner, expected time, required inputs and standard for a successful output. This does not require a 50-page procedure manual. A checklist, visual guide, template or one-page instruction may be enough

The employees performing the work should help create the standard because they understand the practical details and recurring problems better than anyone observing from a distance. The standard should also represent the current best method, not a permanent rule. When the team identifies a safer, faster or more reliable approach, the standard should improve with it

The next step is to make common mistakes harder to create. An online form can prevent submission until required information is complete. A purchasing template can flag an order that exceeds an approved amount. A checklist can ensure that every job receives the same final review before delivery

When a recurring mistake occurs, do not stop at telling employees to be more careful. Ask what allowed the mistake to happen and how the process could prevent it next time

Training people to avoid an error is useful. Designing the error out of the process is better

A newly acquired business will rarely be transformed through one large initiative. The more sustainable approach is to build a habit of making small improvements continuously, a principle often called Kaizen

Employees should have a simple way to identify recurring problems, suggest improvements and test practical solutions. Managers should regularly ask what is slowing the team down, creating rework or frustrating customers

The improvements may seem minor: relocating a tool, removing one approval, updating a template, changing the order of two steps or making performance more visible. One small improvement will not transform the business, but dozens of improvements made across the year can materially change its cost, capacity, quality and employee experience

The people closest to the work will often see the problems first. A new owner’s role is not to arrive with every answer. It is to create the structure and expectation that the business will keep getting better

That also means resisting the urge to change everything immediately. Some apparent inefficiencies may protect quality, manage risk or preserve something customers value. Spend time observing the operation and listening to the people who perform the work before deciding what should change

We will explore this more deeply in the third article, including how to involve employees, sequence improvements and avoid breaking the parts of the acquired business that already work

Do not mistake moving quickly for improving intelligently

Choose one process that directly affects revenue or the customer. This could be converting a lead, preparing a quote, onboarding a customer, completing a job, shipping an order or collecting payment

Walk through the process with the employees who perform it and document:

Do not try to redesign the entire process this week. Identify the one problem creating the greatest delay, cost, quality issue or customer frustration. Then make one practical improvement, assign an owner and measure whether it worked

You did not buy a perfect business. Your job is to leave one part of it meaningfully better every week

Until next time …

One practical way to improve your business each week