In this blog I’ll be helping you, as a business owner, understand the importance of systems within your business and how to approach it.
I’ll start by defining systems, processes and procedures.
So what is a System: Its a set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty or solve a problem.
A Process: is a sequence of interdependent and linked procedures, which at every stage, uses one or more resources i.e. that’s employees, time, energy, money or equipment to convert your inputs, which are data, materials or parts, into your outputs – products, sales invoice etc.
A Procedure: is a step by step sequence of activities or course of action, that must be followed in the same order, to correctly perform a task or process.
For example: In business you’ll have a system for generating money. Part of that system will be your sales process i.e. from first contact with new client right the way through to receiving funds into your bank account, from the sale. Each part of the sales process will have a procedure that has to be followed e.g. a step by step guide on how to record a new leads details or how to raise an invoice.
When you start out in business you have to do everything yourself, so you know how everything should be done and you cope with the workload.
So let’s keep this simple and give an easy example- Imagine you start a coffee shop that sells tea, coffee and cake. We can all relate to that!
While you run it yourself you know exactly how to make the cakes, what goes in them, in what order the ingredients go in to the mixture, how long it goes in the oven, how you decorate it, how big the portions should be, what the finished product should look like and how it should taste. You are making them to your standards or vision.
Your coffee shop does really well because all your customers love your cakes. Because of this growth you cannot cope with the workload so you employ someone to make the cakes while you man the tills and front of house.
Now, at this point, if you do not have any systems, processes and procedures in place the cakes that your new staff member produces are not going to be anything like yours! They could be denser, taste different, and be smaller portions.
You would then lose customers because they are not getting the same experience from your establishment any longer.
To stop this from happening, you would need to document all your recipes in great detail. Take photos of the finished product and give measurements for portion control. That way anyone could make your cakes to the exact same standard as you, and free you up to work on other things
For most companies this is the cycle that happens:
You start out on your own, doing everything and knowing everything.
As you grow and you take on staff, they will report to you, so you’ll still know what’s going on, but it leaves room for miscommunication, and you are left dealing with all the problems, and working long hours. But things are still sort of done your way.
So now you take on and delegate to managers. This might reduce your workload but with no systems in place the managers will work out their own way of doing things and their own rules. All knowledge is now with the managers and you don’t have a clue what is going on. All you get is the information they tell you.
Each manager will create their own team and how they do things, and the separate teams within your business, say Finance and HR, may not communicate well with each other.
Managers might leave and then chaos starts because now that team is reporting to a different manager who might want things done differently.
When a new manager comes in they are then at a disadvantage as they have to then make staff come round to their way of working.
So you get the picture. A chaotic mess is created and the business will suffer.
Here’s some of the benefits of systemising your business:
- Gives you and your staff time back. More automated and mechanical procedures just get the day to day stuff done.
- Reduces errors and miscommunication – all staff know exactly what they should be doing, for whom it is for, when they should be doing it and how they should be doing it. Processes dramatically reduce the uncertainty of how to deliver the desired results. Step by step processes give detailed breakdowns of each step so mistakes are reduced.
- Having a system teaches staff how to do things the company way to the company standard. This makes it so easy to train new staff to your standards very quickly.
- You will have more time to be creative and strategic within your business, because you are not wasting time on the day to day stuff.
- Each stage of your business has a cause and effect. Good systems and processes will deal with these transitions effortlessly. Your business operations should just flow.
- You cannot grow your business if you are constantly reacting to demands and sorting out problems on a daily basis.
- Having good robust systems, processes and procedures in place will increase the value of your business. Having good systems that are well documented, demonstrates to a buyer how efficient your business is running. For your business to be attractive to a buyer it has to work without you. Good systems will allow this to happen.
- You will have the ability to cope with the unexpected a lot easier.
- Your business suddenly becomes easily scalable and can be replicated for franchising.
In my next blog I will look at how you can make a start in systemising your business.
So if you are still asking why you should Systemise?
Systemise stands for: Save Your Self Time Energy and Money Instead of being Stressed and Exhausted . That’s why!