Pillar 8 Your Business Systems

There are two big reasons why small business owners struggle to get time away from their business.

The first is that they need to be there to know what’s going on.

They haven’t developed a key performance report that gives them the information they need each day, week and month.

The second is that the business owner is an integral part of the way the business works, telling people what to do or guiding them in particular tasks.

This is unnecessary when you systemise the business.

As Michael Gerber says, systems run the business, your people run the systems.

You Already Have Systems & Processes

You have systems and processes because work gets done but they may not be very good.

The issue is whether you have accidental systems that have just happened and have quick fix solutions bolted in to solve any problems.

Or if you have up-to-date, documented systems designed to be efficient and effective and which are used all the time.

The documented aspect is important because people can learn how to do something from the procedure notes without having to keep asking for help and instructions.

If you have proper systems, it is best to show a new recruit or someone taking on new responsibilities how to work a system once and then they have the notes to fall back on

The Benefits Of Systems

Good systems create consistent performance.

Well designed systems create consistently excellent performance.

Consistently Effective

It’s like a recipe in your favourite restaurant for something which you reorder.

If the chef has no recipe and makes it up each time, then what you get on your plate is different each time – some times great but some times not so good.

If the chef has a recipe in his or her head, then each time you order you get more consistent results. On days when the chef is away, the consistency problem is back.

When the recipe is written down with detailed instructions and used by everyone, your food is much more consistent.

Variation is virtually eliminated altogether. As the customer your  experience ranges from good to great and you’re happy to keep buying.

Other Benefits of Systems

The second big benefit of systems is that they are designed to be efficient.

Each step can be challenged:

  • Is this really necessary> and
  • Does it add value?

Each step can also be improved so the input/output or effort/reward ratios are improved.

Payback From Systems

More revenue from happy customers and lower costs will help your profit from day to day and month to month as well as giving you the comfort that your business can work without you.

The third benefit happens if you ever think about selling your business.

Just put yourself in the buyer’s position for a few moments and decide if you would rather buy

  1. A business where everything revolves around the owner and little good gets done unless the owner is there checking and directing or
  2. A business which is independent of the owner and works predictably well on its own.

Almost everyone would choose business 2 and even for the same historic profit levels, would pay a higher multiple of profit for business 2.

I mean, why buy headaches and problems when you can buy something that works?

So How Do You Systemise?

There are four steps

  1. Deciding that you will improve your systems
  2. Record – capture your system as it is
  3. Improve
  4. Make sure that the system is used

The big issues are steps 1 and 2.

Deciding to Systemise

It starts with you making the initial decision – often driven out of frustration with what is happening.

Then you need to decide which systems to focus on.

While Michael Gerber would say you should systemise everything, there is a cost in time and effort.

My advice is to start with the important systems:

  1. Business critical – the business couldn’t work without
  2. Those that bring in money
  3. Those that have the highest costs, either directly or which cause the most frustration and indirect cost.

Back to the restaurant example, the very first system to focus on might be hygiene – since, if this fails, the restaurant could be closed.

Just pick one process to start with – trying to do too many at once is a mistake.

Recording Your Systems

You have two options – notes or flowcharts.

Flowcharts may sound daunting but they are not.

In fact flowcharts are a very quick way to capture information and to communicate what is happening and easier to understand than procedure notes.

Flowcharts force discipline in getting the order right and being descriptive in a few words.

If you want to see a variety of different flow charts to both inspire you and to show you how easy they are to create and read, I recommend you sign up for the free cashmaps per day offer (affiliate link – but it is free)

Systems Are So Important

Systems are important but they are not very glamorous.

It is easy to put off systems work but if you have poorly designed systems, they are costing you money.

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