Having Business Systems in Place Viewed as Essential to Success

Having Business Systems in Place Viewed as Essential to Success

Successful business owners in the kitchen and bath industry have a number of qualities in common and one of them is that they implement and utilize certain key business systems that ensure their companies run as smoothly as possible.

According to the National Kitchen & Bath Association, a "systems-dependent" business is far more likely to run smoothly and profitability and is of far more value to potential buyers than a business without those disciplines in place.

Among the systems kitchen and bath dealers should put in place, the NKBA advises, are a Standard Operating Procedures

Manual, an Employee Manual and an effective Payables/Receivables System.

And, there are key questions dealers should ask regarding each area, the NKBA adds. Among them:

  • Standard Operating Procedures Manual:
    1. Does your business have an SOP Manual?
    2. Is it easy to use?
    3. Is all of your staff following it?
    4. Is it updated as business procedures change?

  • Employee Manual:
    1. Does your business have an Employee Manual?
    2. Is it being followed?
    3. Is it periodically being reviewed and updated to reflect current business conditions?
    4. Are benefits and policies clearly described?
    5. Do forms and formats exist for employees to use?

  • Payables/Receivables System:
    1. Does your business use Purchase Order procedures?
    2. Does your business have a Chart of Accounts to code invoices for payment?
    3. Do you use a "blue slip"
    system to target invoices that do not match purchase orders?
    4. Do you have a procedure to identify the gross margin that's achieved for each item sold?
    5. Does your business have a consistent Invoice and Change Order system in place?
    6. Does your business use forms and formats to job-cost the profitability of each project?
    7. Are forms and formats easy for employees to use?
    8. Are solid procedures in place to receive and deliver product?

    When it comes to employees in general, ask the following basic questions, according to the NKBA:
    1. Are your employees trained and experienced?
    2. Are job descriptions spelled out in writing?
    3. Does your business have an organizational chart?