One of the most eye-opening experiences an entrepreneur can have is identifying all the processes (activities, tasks, etc,) that occur in the business. Even more revealing of how the business works is a process map or flow chart that traces how information flows through the business. The reason for this is that designing the way the business will work is often not the entrepreneur’s area of expertise. Entrepreneurs are usually good at generating business ideas, testing concepts, and gathering resources to give the new business traction. Designing the operations and organization of the business is not always within their competence. Nevertheless, considering how the business will operate is crucial to figuring out how many people to hire, how much equipment to purchase, and what kind of facility will be needed.
To create a map of the business processes, take an imaginary tour of the business during a single day, listing all the tasks, people, equipment, supplies, and space required to run the business. For example, if customers entered the door of this business, what would they see? Who does the work in this business? Where do they work? What do they need to do the work? What information is being generated? Where does that information go?
The information gathered during that “fantasy tour” will also be useful when figuring expenses for financial projections later on and when determining what kind of personnel need to be hired to perform those tasks.
Another benefit of understanding how the business works is that such familiarity makes it easier to determine whether to employ a traditional organizational structure or a virtual organizational structure.