How To Create An Effective Business Structure

For a business to succeed, you don’t just need capital, you need an effective business structure. This is where many businesses have an issue, creating that structure. Your organizational structure determines how well your business performs operationally and administratively.

We understand how difficult it is to create an effective business structure, especially for small businesses. This is why we put together this guide to help you out.

Factors That Influence Business Structure

Before we discuss how to build your business structure, let’s discuss the factors influencing your structure. There are three important factors to watch out for:

The long-term business vision.
Value proposition.
Your products or services.

Without all of these, you cannot set up an effective business structure. With these out of the way, let’s look at how to build that much required “effective business structure.”

Creating An Effective Business Structure

Let’s show you how to create an effective business structure in this section.

Create departments

For most businesses, this is the first step to take when creating a business structure. Draw up a simple layout for your business and state the core functions of your business. In most cases, these functions will be:

Administration and finance
Operations
Marketing and sales

Note that you can have more departments depending on your organizational objectives.

State specific roles for each function

Now that you have broken down your organization based on functions, let’s take it further. It is time to list the roles that each department must carry out. Since we are working with three departments, we will state common roles under each.

Administration and finance – This department focuses on the day-to-day running of the business. It also sees to it that you manage your financial records properly. A lot of automation, payroll, and attendance issues are handled by this department. These are some of the specific roles:
- Office management
- Accounting
- Bookkeeping
- HR
- IT
- Financing
Operations – This has to do with the creation of products and delivery of services. The aim is to ensure that the business delivers on its promise to its target market. Some of the roles here include:
- Product development
- Customer service
- Production
- Shipping and fulfillment
Marketing and sales – As you can guess, this deals with publicizing the brand. It also focuses on convincing the target audience to make purchases. The roles here include:
- PR
- Online marketing
- Lead generation
- Account management
- Website maintenance

Note that you can have other roles depending on your business requirements. For example, you may want to look into using invoicing solutions like PayPal and Letushostyou. You may also consider different integrations to reduce the number of roles carried out by each department.

Assign roles to individuals

Great job so far!!! Now you have a structure on paper with roles and responsibilities. It is time to assign these roles to specific individuals. Since you are working with a chart, you can write the names of the individuals beside each role. However, if you don’t have the individuals with you presently, simply write down your expectations for each role.

What kind of individual are you looking for to fill each position? You can take it further by adding some specific responsibilities. It is more like a job description. This way, when you finally get the individual on board, it is easy to explain your expectations.

Define your leadership structure

Here, you are defining who is leading the organization. They don’t necessarily have to be a part of the original matrix. However, it is important that you pick the right hands so that they can set the right examples.

The leaders of your business should complement each other in their attributes. Also, ensure that you introduce an inclusive culture to your leadership team. Your leadership team should have a clear picture of the direction of the business. They should also have the technical know-how and charisma to steer the rest of your business in this direction.

Conclusion

Don’t forget that your business structure is key to the success of your business. We have shown you how to create an effective business structure in this post. You can check out Letushostyou to see an array of features that will help improve your business.