When I mention business systems to you, what comes to mind? Do you think of an IBM mainframe computer sitting in a big room in the middle of your building? Do you think of expensive, highly specialized software? That’s what many small business owners imagine. And they think it’s not for them. If that’s what you think, you’re only half right.
Half right because expensive, highly specialized software is probably not for you. Half wrong because good business systems most definitely are. A business system isn’t hardware or software. It’s the way that you do any part of your business. It’s how you do things. You are using systems all the time, you just may not be using them efficiently.
I regularly urge business owners to get everything they know about their business out of their head and onto paper. I’m urging you now to do the same with your systems. Start writing out how you do things in your business. At a minimum, write out how you treat your customers or clients, how your paperwork for each sale flows, how your production systems work, how you market to clients, and how you do your bookkeeping.
Do this in detail. For each area, make a very detailed description of every step in the process. Include what you do and why you do it. Include the subtle parts that make your company uniquely you. Include the parts that you are proud of. Include the tricks that make it efficient. Include what you tried that didn’t work and explain why. Each system should become a very rich, highly detailed system. Why so much detail?
Because this is the beginning of being able to consistently deliver results. And the beginning of being able to consistently deliver results even when you aren’t around. Documented (written) systems make delegating much more manageable. Delegating is one of the keys to success in growing your business while still having a life.
Maybe you don’t want a bigger business. Maybe you want to keep yours small. Still, wouldn’t it be nice to be able to go on a long vacation and turn the keys over to someone else to run and make money for you while you are gone? Without systems, that wouldn’t be remotely possible. With systems almost anything is. Now, does that sound like something that should only be for big business? I think not.
4 Simple Steps to Developing Business Systems
There are several reasons why you’d want to build systems and processes in your business. The main ones are:
1. Precision and consistency. By having set processes for how tasks should be completed, you will get consistent quality results.
2. Time and money savings. When employees know precisely how to do something and do it the same way each time, they eventually become much better and faster at performing the task. This saves time and money, and gives you a competitive advantage.
3. Scalability. When you have set processes for completing tasks, it’s much easier to hire and train new employees and grow your business.
4. Free your time and build business value. Developing and implementing systems allows your business to run without you. This frees up your time to focus on building your business further (and taking time off) and makes your business more attractive and valuable to potential acquirers (because it’s not dependent on you and the acquirer can see how the business could continue to scale and provide value).
Each of these are compelling reasons to build systems and processes in your business, and is why building systems is one of the pillars of an 8-figure business.
Here are five strategies to help your business evolve and mature.
1. Start at the beginning. Running a small-business often means juggling many things and responding to the immediate needs of the day. In this constantly evolving environment it is easy to work intuitively and just get things done. However, thinking about the steps and procedures of a business from the very first day is vital to the ultimate success of the business. Don’t put documenting your process off to another day. Instead, take note of every procedure from the very beginning.
2. Write it down. As you go through the daily work, take careful notes on the day-to-day processes. Take note on everything from how files are saved to how big decisions are made. If there are other people working in the business with you, have those people also keep close records of how they manage tasks. It is always easier to edit and delete than try to fill in the blanks and remember exactly how certain procedures were handled.
3. Be proactive. Anticipate problems and methodically create solutions. Identify areas of concern and meticulously develop a response system. Even when certain actions seem obvious, make a note of the steps and approaches. What is intuitive for one person may not occur to another. By keeping close notes of all procedures other members of the team will be able to understand the decision-making process and arrive at the appropriate results.
4. Get it out of your head. Once all of the operations are recorded, it is useful to have others review the material. Collaborate with a colleague or hire an outsider to develop a manual for communicating the company’s operations. Someone who is not in the thick of the process may have a clearer ability to convey the important ideas.
5. Share it. Once the operations manual is created, start sharing it with the members of the company. Make sure that all employees have easy access to the information. Posting the procedures on an intra-company website or distributing hardcopies of the material will encourage people to refer and follow the guidelines. As updates are made to the materials, have alerts sent to the appropriate parties so that everyone is up to date.
Here are 4 simple steps to follow to develop systems in your business:
Step #1: Look at your current business processes
In developing your business systems, you should first look at the key tasks and processes your company performs on a daily basis.
For example, if you operate a laundry business, your business processes will include cleaning the laundry machines, managing customer drop-off orders, sweeping the floors, paying the bills, ordering supplies, etc.
Next, assess each of these processes to figure out which ones to focus on systematizing first. For example, figure out which processes, if improved, could most improve customer satisfaction, revenues and/or profits.
Step #2: Develop your business systems
Once you’ve identified the initial process(es) to improve, it’s time to develop your business systems. In developing your systems, start with the outcome, that is, how should the task or process look at the end when it is completed flawlessly.
Then work backwards to figure out the best steps to achieve that outcome. When doing that, and comparing this to your current processes, try to look for the most efficient steps and eliminate any unnecessary ones.
Importantly, in doing this, you must write down the system on a sheet of paper. Yes, it’s as simple as “Step 1, do this” and “Step 2, do that.” The key is to make it easy and foolproof so any of your employees could follow it.
Step #3: Test and redesign your system
When I develop a new system, I like to complete it myself a few times in order to test it.
Importantly, when doing this, I look at the most challenging and/or time consuming parts of the system and then brainstorm ways to improve it. Consider this: if you create a process that allows a task to be completed in 9 minutes instead of 11 minutes, and that task is done twice a day by two employees, that improvement will save your company 49 hours of labor each year.
Also look for routine things that can be automated, such as the payment processing. For instance, manually writing customer receipts might take a minute while an automated register could create a receipt in seconds.
Step #4: Test-run with the team
Once you’re done with redesigning your first business system, now is the time to implement it. To make teaching others faster, it helps to prepare as much as you can, and to actually demonstrate or allow them to see a demonstration of how the work is to be done.
If you’re there in person, show them or have them watch someone in action to model going through the system. If it’s work that is done on a computer, create a screen recording so others can watch to learn it.
The best way to train employees is by having them perform the process on a real-life order or project. Then the work that needs to get done is completed, and you get to see their performance and give feedback.
Then, over time, encourage your employees to try to improve your existing processes and systems. Have your checklists and flow charts readily available so they can follow them and propose new ways of doing things. Because as more and more of your business’ processes become systematized, and your systems become better and better, your revenues and profits will soar and your business will be the envy of your market.