The document presents the Lean Business Engineering Method, focusing on improving small business success through education in management and operational practices. It highlights statistics about small businesses in the U.S., reasons for their failures, and outlines a structured approach for developing management knowledge, operational plans, and financial performance strategies. The method aims to optimize business operations by integrating western and lean management principles, ultimately enhancing profitability and customer satisfaction.

1. LEAN BUSINESS 2100 MANAGEMENT PROGRAM
Tutorial1
GENERAL MANAGEMENT
CheckPoint3
THE LEAN BUSINESS ENGINEERING METHOD
www.LeanBususinessClub.com
© Lean Business Club, Inc. 2016

2. THE LEAN BUSINESS ENGINEERING METHOD
What Will You Learn In Check Point 3?
1. Statistics about small business in the U.S.
2. What are the main reasons for small business failure?
3. What is the biggest problem about small business?
4. What is the key to your success in business?
5. Two components of the lean business engineering method
6. The prime purpose of the lean business engineering method
7. What is the lean business engineering house?
8. The benefits of the lean business engineering method
9. What is the lean business engineering process?
10. The first stage in the lean business engineering process
11. The Lean Business 2100 knowledge-based foundation.
12. The second stage in the lean business engineering process
13. Part 1.1: Lean Operational Management Analysis
14. Part 1.2: Financial Performance Analysis
15. Part 2.1: Lean Operational Management Plan

3. THE LEAN BUSINESS ENGINEERING METHOD
What Will You Learn In Check Point 3?
16. Part 2.2: Financial Performance Plan
17 Part 3: Lean Business Solutions
18. The Lean Business Engineering Method Contribution
19. For Serious Business Owners Only
20. The Latest Information Online

4. Do You Need To Know Check Point 3?
Level Your Management Level Yes Optional
1 I Am An MBA Student. V
2 I Am A Professional Manager In A Company.
V
3 I Plan To Start A One-Person Business.
V
4 We Plan To Start A Small Business Without
Employees.
V
5 I/We Plan To Start A Small Business With
Employees.
V
6 I Am A One-Person Business Owner. V
7 I Am A Small Business Owner With Employees.
V
8 We Are Small Business Owners Without
Employees.
V
9 We Are Small Business Owners With
Employees.
V
10 I Am A Management Consultant Or A CPA. V

5. Statistics About Small Business In The U.S.
According to the U.S. Small Business Administration (SBA), there
are about 27.9 million businesses in the United States and they include:
• About 21.7 small businesses without employees or micro businesses.
• About 6.2 million small to medium-sized businesses with one to 500
paid employees.
• About 20,000 large businesses with over 500 paid employees.
The U.S. Bureau Of Labor Statistics provides the following details
related to small business activities during 1994 – 2010 period:
• About 500,000 to 650,000 new business startups per year.
• About 2.5 million to 4.7 million new jobs per year created by new
business startups.
• About 70% of all small business startups fail after 12 years in
business.
According to the American Bankruptcy Institute:
• About 43,000 businesses per year filed for bankruptcy during a 1994
- 2012 period.

6. What Are The Main Reasons For Small Business Failure?
The main reasons for small business failure usually include:
• Lack of business knowledge and management experience by
business owners.
• Loss of customers due to poor value of products and services offered
by the organization.
• Insufficient working capital employed by the organization.
• Poor organizational culture adopted by business owners.
• Unprofessional management practices employed by business
owners.
• Absence of a cohesive management structure within the
organization.
• Excessive waste of human, material, and financial resources within
the organization.
• Poor communication between business owners and employees within
the organization.
• Low level of morale and motivation by employees within the
organization.
• Low level of employee productivity within the organization.
• Health problems experienced by business owners.
• Bad economy.

7. What Is The Biggest Problem About Small Business?
The biggest problem about small business is this:
The majority of people in business don't have business management
education, while the majority of people with business management
education are not in business!
What Is The Most Important Question That You Need To Ask?
The most important question that you need to ask yourself to succeed in
business is:
Do I really know enough about business management to succeed in
business in the long-term?
What Do You Need To Remember To Succeed in Business?
You must remember these three critical facts to succeed in business:
• The more you will learn today, the more you will realize how much
you did not know yesterday.
• Your business management knowledge will become the cornerstone
of your success in business.
• Time will never come back, money you can make and lose, but
knowledge will stay with you forever!

8. What Is The Key To Your Success In Business?
The key to your success in business includes the following:
• Your sense of decency and positive attitude.
• Your business knowledge and experience.
• Your entrepreneurial skills.
• Your professional knowledge and skills.
• Your ability to finance your business.
• Your flexibility in dealing with people.
• Your focus and positive energy.
• Your ability to “wear several hats” at the same time.
Are You Ready To Engineer Your Business For Success?
If you are ready to engineer your business for success then you should
be prepared to become a “Business Engineer”.
If you want to become a business engineer, you will need to learn about
the Lean Business Engineering Method.

9. Two Components Of The Lean Business Engineering Method
The Business
Engineering Method
Lean
Management
The business engineering
method provides cross-functional
management guidelines designed
to enable business people to
maximize business performance
and profitability through
Western-style business
management values, methods,
and principles.
Lean management provides
practical guidelines designed to
enable business people to
maximize the value of products
and services offered to
customers and to improve
business performance through
Japanese -style business
management values, methods,
and principles.
The Lean Business Engineering Method
Lean Business Engineering is a cross-functional method of applying
traditional Western-style management guidelines and lean
management guidelines to operational activities within any
organization to maximize the product and service value, operational
performance, and profitability. This method is at the core of the Lean
Business 2100 Management Program.

10. The Prime Purpose Of The Lean Business Engineering Method
The Lean Business Engineering Method is designed for business
people, professional managers, consultants, CPAs and students:
• To evaluate their potential for business success.
• To evaluate their personal level of business management knowledge.
• To complete their cross-functional management training.
• To evaluate their company's operational performance.
• To develop a comprehensive plan of action.
• To implement cost-effective management solutions in all major
operational areas of business activities.
The Lean Business Engineering Method
Represents A Universal Management Tool
• A Learning Tool for MBA students.
• A Management Tool for professional managers.
• A Be-Your-Own-Management-Consultant Tool for small and
medium-sized business owners.
• A Professional Management Tool for management consultants
and pro-active CPAs or management accountants.

11. What Is The Lean Business Engineering House?
The Lean Business Engineering House provides a descriptive
representation and outlines the most important elements of the Lean
Business Engineering Method.

12. The Benefits Of The Lean Business Engineering Method
• Improved personal business knowledge.
• Improved cross-functional business analysis, planning and solutions.
• Improved level of customer loyalty and increased level of repeat
business.
• Improved level of employee morale and motivation.
• Streamlined operational activities.
• Improved quality of your products and services.
• Improved value and reduced amount of waste.
• Reduced operational costs.
• Reduced inventory requirements and associated costs.
• Improved productivity and reduced turnover of employees.
• Improved communication.
• Increased productivity and profitability.

13. What Is The Lean Business Engineering Process?
The Lean Business Engineering Process is the process of
implementing the lean business engineering method and it can be
accomplished in two stages.
Two Stages In The Lean Business Engineering Process
Stage 1: Accomplish your personal objectives in business.
Stage 2: Accomplish your business objectives (for business owners
only).
The First Stage In The Lean Business Engineering Process
1. Evaluate your personal potential for business success.
2. Evaluate your personal business management knowledge.
3. Develop a plan of action to improve your personal business
management knowledge.
4. Improve your personal business management knowledge on a
continuous basis.

14. The Lean Business 2100 Management Program
Provides The Knowledge-Based Foundation
The Lean Business 2100 Management Program provides the
knowledge-based foundation for the lean business engineering
method.
This program contains Five Tutorials and 20 Check Points per
Tutorial covering five major operational management areas.
Five Tutorials Contain 100 Check Points
TUTORIAL 1
General
Management
TUTORIAL 2
Human
Resources
Management
TUTORIAL 3
Financial
Management
TUTORIAL 4
Operations
Management
TUTORIAL 5
Marketing
And Sales
Management
20
Check Points
(1-20)
20
Check Points
(21-40)
20
Check Points
(41-60)
20
Check Points
(61-80)
20
Check Points
(81-100)

15. The Second Stage In The Lean Business Engineering Process
Part 1: Lean Business Analysis
1.1 Lean Operational
Management Analysis
1.2 Financial
Performance Analysis
Part 2: Lean Business Plan
2.1 Lean Operational
Management Plan
2.2 Financial
Performance Plan
Part 3: Lean Business Solutions
3.1 Lean
General
Management
Solutions
3.2 Lean
Human
Resources
Management
Solutions
3.3 Lean
Financial
Management
Solutions
3.4 Lean
Operations
Management
Solutions
3.5 Lean
Marketing
And Sales
Management
Solution
Repeat The Above Process On An Annual Basis.

16. Part 1.1: Lean Operational Management Analysis
Lean Operational Management Analysis is designed to enable you
to complete a detailed evaluation of your company's current activities
in all operational areas and identifying strengths and weaknesses in
each area.
Key Questions Of Lean Operational Management Analysis
• How strong is our company's performance in various areas of
operational activities using traditional Western-style management
guidelines as performance evaluation benchmark?
• How strong is our company's performance in various areas of
operational activities using lean management guidelines as
performance evaluation benchmark?
Five Elements Of Lean Operational Management Analysis
Lean
General
Management
Analysis
Lean
Human
Resources
Management
Analysis
Lean
Financial
Management
Analysis
Lean
Operations
Management
Analysis
Lean
Marketing
And Sales
Management
Analysis

17. Part 1.2: Financial Performance Analysis
Financial Performance Analysis is designed to enable you to
complete a detailed financial performance evaluation of your company
activities.
Key Questions Of Financial Performance Analysis
• How is our company doing in terms of its financial performance and
results at present?
• What were our company’s financial results during the last three
years?
• What are the financial performance trends developed by our
company in the last three years?
Three Elements Of Financial Performance Analysis
Current
Financial
Analysis
Comparative
Financial
Analysis
Financial
Ratio Analysis
(Optional)
• Current balance
sheet
• Current income
statement
• Current statement
of cash flows
• Comparative
balance sheet
• Comparative
income statement
• Comparative
statement of cash
flows
Evaluation of financial
ratios related to:
• Solvency
• Profitability
• Liquidity
• Ability to manage
assets

18. Part 2.1: Lean Operational Management Plan
Lean Operational Management Plan entails developing a detailed
plan of action related to your company’s operational activities and
assigning the responsibility to each member of the management team.
Key Questions Related To Lean Operational Management Plan
• What operational tasks do we need to accomplish for maximizing
our company's performance in accordance with traditional Western-
style management guidelines and lean management guidelines?
• Who should be responsible for implementing each operational task?
• When should each operational task be completed?
Five Elements Of Lean Operational Management Plan
Lean
General
Management
Plan
Lean
Human
Resources
Management
Plan
Lean
Financial
Management
Plan
Lean
Operations
Management
Plan
Lean
Marketing
And Sales
Management
Plan
Plan A For
Check Points
1-20
Plan A For
Check Points
21-40
Plan A For
Check Points
41-60
Plan A For
Check Points
61-80
Plan A For
Check Points
81-100

19. Part 2.2: Financial Performance Plan
Financial Performance Planning entails developing a comprehensive
financial plan of your company activities for the current and next fiscal
year periods*.
The financial performance plan, or a Master Budget includes:
• Operating Budget,
• Capital Expenditure Budget
• Cash Budget.
The financial performance plan must also take into account various tax
strategies to ensure effective utilization of your company's financial
resources.
Four Elements Of The Financial Performance Plan
Operating
Budget
Capital
Expenditure
Budget
Cash
Budget
Tax
Strategies

20. Part 2.2: Financial Performance Plan
The main purpose of implementing Lean Business Solutions in all
areas of your company’s operational activities is:
• To maximize the value of your company’s products and services
offered to customers.
• To streamline all operational activities.
• To minimize waste.
• To improve overall performance efficiency.
• To reduce operational costs on a continuous basis.
Apply Lean Management Guidelines
To All Operational Activities Within Your Company
Implement
Lean
In General
Management
Activities
Implement
Lean
In Human
Resources
Management
Activities
Implement
Lean
In Financial
Management
Activities
Implement
Lean
In
Operations
Management
Activities
Implement
Lean
In Marketing
And Sales
Management
Activities

21. The Lean Business Engineering Method
Contribution To General Management
• Meaningful direction in developing strategic plans.
• Effective implementation of strategic plans.
• Comprehensive management by objectives (MBO) process.
• Improved method in developing operational plans.
• Effective implementation of operational plans.
• Comprehensive plan of management.
• Sound organizing process.
• Effective organizational structure.
• Improved communication process.
• Strong management control.
The Lean Business Engineering Method
Contribution To Human Resources Management
• A better way of treating employees.
• Effective job analysis.
• Concise job descriptions and job specifications.
• Cost-effective employee training and development.
• Improved employee motivation.
• Effective employee performance appraisal.
• Sound employee career management.
• Improved labor-management relationship.
• Improved employee safety and health.
• Effective conflict management and resolution.

22. The Lean Business Engineering Method
Contribution To Financial Management
• Improved financial management process.
• Accurate financial information.
• Effective bookkeeping process.
• Accurate financial statements.
• Effective financial performance evaluation.
• Improved budgeting process.
• Effective internal control and cash management.
• Improved control of purchases and disbursements.
• Improved inventory management.
• Accurate cost accounting.
The Lean Business Engineering Method
Contribution To Operations Management
• Improved facility design, location, and organization.
• Effective product, service, and process design and standardization.
• Effective equipment evaluation and selection.
• Improved plant layout.
• Cost-effective equipment maintenance and replacement.
• Improved operations planning.
• Improved material requirements planning.
• Effective operations control.
• Improved supply chain and material management.
• Improved total quality management.

23. The Lean Business Engineering Method
Contribution To Marketing And Sales Management
• Comprehensive target marketing.
• Effective marketing strategies.
• Effective product and pricing strategies.
• Effective promotional and distribution strategies.
• Improved direct marketing.
• Sound marketing and sales planning and budgeting process.
• Improved sales force recruitment, selection, and training.
• Effective sales organization.
• Improved sales force management and motivation.
• Effective sales performance evaluation and control.
The Lean Business Engineering Method
Contribution To Your Organization
• Improved business knowledge by your management team.
• Detailed business analysis of your company’s performance.
• Comprehensive business plan for your company’s operations.
• Cost-effective lean business solutions for your company.
• Improved value of products and services offered by your company.
• Improved customer satisfaction with your products and services.
• Improved long-term customer loyalty toward your company.
• Improved operational value stream within your company.
• Reduced and waste within your company.
• Improved process of selecting the most qualified employees.
• Improved level of management control within your company.
• Improved communication, morale, and employee motivation.
• Improved efficiency and productivity within your company.
• Improved profitability of your company and higher ROI.

24. For Serious Business Owners Only
Reprinted with permission.

25. Additional Information Online
For additional information about
the Lean Business 2100 Management Program online
please visit
www.LeanBusinessClub.com
© Lean Business Club, Inc. 2016