What is a Business Process? Definition, Types, Examples, and Best practices for small businesses.

No matter how big or small a company’s team or financial income is, having a system of procedures in place is essential for its success. In today’s highly competitive environment, it will not be possible to continue with our business if we solely rely on reducing our service fees to have an advantage over rival businesses.

We have compiled everything that any CEO of a startup, small business owner, or freelance service provider may need to keep his business ahead of the competition without compromising his profits.

If you are a person who wants to see your business flourishing then this blog will gonna be a goldmine.

We have tried to cover all the aspects of a business process in this blog but if you still have some queries or want to talk about your business, feel free to book our free process audit today.

• Practical definition for understanding the business process as a business function.
• Real-time examples of different types of processes and their role in your business.
• Difference between process, project, and function with practical examples.
• Why business processes are crucial for small businesses?
• What goes into making a robust business process?
• The importance of updating the process periodically
• Steps of developing the business process using the PDCA approach.

Business processes are tasks or sets of actions performed by people or systems in a structured manner to achieve an organizational goal or add value to the end customer.

It has been proven that businesses with solid business processes survive the worst storms. Statistics show that businesses with well-defined processes have reduced operational costs by 50%.

Having a business process also allows you to make your business eternal. It also serves as a foundation for more advanced optimization practices like business process automation that save your team from a cycle of repetitive tasks and let you can and your team focus on what really matters.

Business Processes are categorized based on various factors like their purpose, stakeholders involved, and functionality of the process within the organization.

Business processes are usually categorized into 3 types:

1. Core Processes
2. Support Processes
3. Management Processes

Core processes are set of tasks that manage the operations of your business and enable your team to add value to the end customer, such as;

• Material procurement in a manufacturing business
• Back-end development in a web-development agency

According to a study by Smartsheet, an average business has 10 to 15 core business processes that drive its operations.

You should keep the core processes of your business updated and optimized as they are directly responsible for the value generation of your business.

Support processes are the set of tasks and systems that are executed to smoothen the execution of the core processes of your business.

According to Gartner, supporting processes account for 20% to 30% of a company’s overall business processes.

Some examples of Support processes are;

• HR department
• Finance department
• Quality assurance

These processes enable you and your team to create a collaborative environment in the organization where the core processes can be optimized to work efficiently.

Management processes monitor the internal and external functionalities of your business, analyze opportunities and challenges, and ensure continuous improvement of all processes.

Here are some examples of these processes;

• Budgeting
• Risk management
• Sales forecasting

These processes ensure that all the functionalities of your business work seamlessly. As per ServiceNow, automating support processes can result in a 25% increase in team productivity.

Research shows that over half of small businesses fail within five years of their launch, while 20% fail within one year. If you are a business owner or going to start one, you must be intrigued to know – Why this happens? OR How you can immune your business to keep going?

While there could be multiple reasons that factor in to ruin your business but the iceberg for your unsinkable titanic is; the lack of an efficient business process.

We have observed that most small teams and startups often overlook the importance of optimizing their business processes. Customer acquisition, sales growth, and profitability remain their primary concerns. – But the question is; Is it worth the risk?, Can they scale?

No, it’s not. Because having a well-defined business process gives you a clear picture of your entire business, its inefficiencies, and its loopholes.

Optimized Business Process helps you to;

• Identify where your business is bleeding.
• Hire only those who are required for growth.
• Figure out where you can put automation.
• Integrate management tools to achieve productivity.
• Execute more with less.

Many business individuals often confuse Business processes with other business-related terms that may look similar but have entirely different meanings.

Some of these terms are; Project and Procedure.

To end this confusion and make things simpler we have compared all three terminologies starting from process.

As we have covered the definition of a business process and its types, we found that processes are day-to-day operations to add value for the end customer or achieve a specific goal.

Usually, processes remain unchanged for a long period of time unless there is a need to improve them to make them more rigorous and efficient.

Let’s understand it with an example, if you like coffee and follow the same recipe to make your coffee daily then every step of that recipe is part of the process.

And the goal of this process is to make a delicious coffee with your distinct recipe to produce the same taste that you and your customers love.

BTW moderation is key, consumption of more than 8 ounces of brewed coffee may cause trouble.

Projects are focused on creating something new or implementing a change. They are a set of unique, time-bound, and non-repeatable tasks.

In simpler words, a project is a set of processes that have a clearly defined starting and ending process.

Suppose you make fantastic coffee that everyone likes and now you want to convert this skill into a business. To make it happen you have to draft a business plan, execute the plan, standardize the process, finalize the menu, and finally launch the cafe. After that, the project of setting up a cafe is officially completed.

A procedure is a set of detailed instructions that guide to execute the process to achieve a goal or to add value.

Unlike processes, procedures are detailed instructions that could be changed to execute the process more efficiently.

Onboarding documentation is a great example of procedure as it includes a detailed set of instructions related to documents, signatures, and agreements.

Let’s get back to your imaginary cafe, the ambiance is great, coffee is unmatched but how you will ensure customer satisfaction? – That’s where the procedure, commonly known as SOPs, comes in.

Procedures help you give your clients the same experience whenever they enter your cafe, interact with staff, order a coffee, or pay the bill.

We have seen how much a business process contributes to the business success there is no need to say what harms an inefficient process can cause.

In a study by McKinsey, 60% of executives said that bad processes were the biggest barrier to achieving their business objectives.

There are some must-haves of a good business process that you should focus on while developing the business process for your business.

A robust and sustainable business process must have the following attributes:

• Finite: The business process must have a defined starting and ending point with a fixed number of steps.
• Repeatable: Processes must be able to be repeated indefinitely with an accurate and consistent output after every cycle.
• Well-defined: The process should have clear inputs, clarity of the tools and techniques involved, and a precise explanation of the output with the quality requirements.
• Create Value: Every process must have a significant part in the execution of the task and should add value or remove it from the business process.
• Flexible: Sustainable processes are those that are change-ready and can cater every improvement and optimization effort without affecting the outputs.
• Transferable: The process must reduce dependency on specific individuals and should be designed so that any person can be trained to execute it effectively.

If your business process has the above-mentioned attributes, it will help you and your team execute more with less.

Business Process Management cannot be taken for granted, no matter how successful your business idea is. If you are weak on the process management front TODAY, your business will fall apart TOMORROW.

That’s why it is critical for your business that your process remains optimized and up to date so your business can thrive.

Here’s how well-optimized business processes help businesses thrive:

To Ensure the Scalability of the Business:

Every business wants to scale its business; business process management will help you by providing detailed statistics and data. That will help you identify the resources required to upscale your business without disrupting your ongoing process and minimize risk.

Improve Efficiency by Reducing Redundant Actions and adding Automation:

Delivering on time is fundamental for client retention and satisfaction. Business Process Management helps you create reusable templates for your services using a relevant Project Management tool. Every time you have a new project, you don’t have to recreate the wheel from scratch, saving you tons of time and helping you meet your deadlines on time.

Develop a Culture of Fast Pace Decision and Implementations:

Process management allows your business to adopt any changes swiftly and at the minimum cost possible. It also helps you to stop the process at any point, identify the issue, resolve it, and continue the process at a fraction of the time and cost.

Improve Visibility on Performance Data to Drive Business Decision

If your team needs clarification about their day-to-day task, need to know their priorities, which client to follow up with, etc. Dashboards can help a ton. Your team can focus on their work productively and efficiently while you stay updated about progress regarding a task.

Design the Processes to Work like a Well-Oiled Machine – Workflow Automation

Process management gives you the facility to automate every repetitive task and helps you save tons of time and effort. With Workflow Automation, you can use your resources more efficiently and productively as you don’t need someone to take care of repetitive tasks.

Create A System that Ensures best Value Delivery for Your Clients

Well-defined processes and automated tasks help you and your team to focus on your clients. You can respond more quickly to proposals, build solutions faster, and customize more rapidly. Thus you can increase customer satisfaction without hiring dedicated staff for client handling.
 

The success of a business relies heavily on the efficiency of its business process.

Have you ever wondered how your business processes evolve to increase their immunity?

Out of all the available approaches, Deming Cycle (PDCA) is the most widely used method to make the process stronger, more efficient, and better than ever before.

The Deming cycle contains four stages;

1. Plan
2. Do
3. Check
4. Act
   . . . repeat!

Ready Logic Interprets and implements the PDCA approach as follows;

This is the most critical stage of the process. This is where we identify the gaps, gather requirements, identify goals, create solutions, and create workflow diagrams. The output here is a detailed plan, with requirements mapped out, and a complete plan of action is created.

This is the execution part of the process lifecycle, the most viable solution is implemented to achieve the goals identified in the planning stage.

After the process has run for some time, it is moved to this stage to test the results, monitor the KPIs, and audit the efficiency to determine whether it is meeting the goals or not.

The decision-making process takes place at this stage based on the findings of the previous stage, to determine which improvements are required and what needs more time to show results.

In this digital era, it is impossible to manage your business process efficiently without using digital tools.

Project Management (PM) software are digital tools that can be customized to fit individual business needs and streamline the workflow of our business processes as well as allow us to automate every aspect of our business process.

If done effectively, you will be able to:

• Have a holistic view of your entire business process to identify bottlenecks and redundancies.
• Remove duplications so resources can focus on work that really matters.
• Automate repetitive tasks using in-built automation and third-party integrations to reduce cost-to-serve and increase profit margins.
• Improve productivity using team roles and time tracking features and real-time traceability.
• Make detailed and data-driven decisions using dashboards.

Some of the best project management tools are;

• ClickUp
• Asana
• monday.com
• Atlassian Jira
• Wrike

ClickUp

ClickUp is a project management and productivity software designed to help teams organize and manage tasks, projects, and workflows.

It offers a variety of features including task lists, calendars, time tracking, goal setting, and integrations with other tools. ClickUp allows users to customize their workspace and view tasks in various formats such as lists, boards, and timelines.

The software is suitable for teams of any size and industry, and can be used for project management, agile development, marketing, HR, and more.

ClickUp is known for its user-friendly interface, efficient task management, and robust collaboration capabilities.

Asana is a cloud-based project management software designed to help teams organize and manage tasks, projects, and workflows.

The platform offers a range of features including task lists, calendars, timelines, and integrations with other tools. Asana is highly customizable, allowing users to create custom workflows, templates, and reports.

It can be used by teams of any size and industry, and is particularly suited for creative, marketing, and engineering teams. The software is known for its user-friendly interface and robust collaboration capabilities, making it a popular choice for project management and team communication.

Asana is also known for its mobile app, which allows users to access their tasks and projects on the go.

monday.com is a cloud-based project management software designed to help teams manage tasks, projects, and workflows.

It offers a range of features including customizable dashboards, time tracking, project templates, and integrations with other tools.

The platform is user-friendly and allows users to visualize tasks in a variety of formats such as lists, boards, and timelines. monday.com can be used by teams of any size and industry, and is particularly useful for remote teams due to its robust collaboration capabilities.

The software is known for its ease of use and flexibility, making it a popular choice for project management and team collaboration.

Jira is a software application developed by Atlassian that is used for project management, issue tracking, and bug tracking.

It allows teams to plan, track, and manage tasks and projects using agile methodologies. Jira provides a centralized platform for collaboration and communication between team members, stakeholders, and customers.

It supports custom workflows, integrations with other tools, and reporting and analytics to help teams track progress and identify areas for improvement.

Jira is widely used in software development, but it can also be used for other types of projects, such as marketing campaigns, HR initiatives, and legal cases.

Wrike is a cloud-based project management software designed to help teams collaborate and manage workflows.

The platform offers a range of features including task management, time tracking, Gantt charts, and integrations with other tools. Wrike is highly customizable, allowing users to create custom workflows, templates, and reports.

It can be used by teams of any size and industry, and is particularly suited for marketing, creative, and product teams.

The software is known for its user-friendly interface and robust collaboration capabilities, making it a popular choice for project management and team communication.

• Business Processes are vital for the sustainability and scalability of the business.
• Project, Process, and Procedure aren’t the same or cannot be used interchangeably.
• Having a business process isn’t just enough it should have the essentials.
• Deming Cycle is a great approach to keep your process up to the mark.
• You can mold PM tools to manage your business process efficiently.