When we recommend that business owners create systems, they see it as one of those activities to do for the sake of it. They don’t see the importance because they’re used to working in their businesses.
But it is difficult to grow a business, and a lot more difficult growing a business that lacks a system. A business without a system depends on you – the owner and other people to function. If you get called away on something for a day, the business suffers. If you lose a critical staff, the business suffers.
To grow a business without a system, you would work extra hours, and still not get the financial freedom you want.
I have seen business owners put long hours into their businesses and end up getting frustrated and loathe their businesses.
And what is worst, is that they cannot sell it even if they want to because – it is not a business if it still depends on you. Without you, it all crumbles and everything you’ve worked for all this time is in vain.
What is a Business System?
A business system is a collection of processes, tools and resources that work together to achieve a specified end goal.
A good example that better illustrates what a business system is, is a restaurant. To produce a meal that is the end product of a restaurant, there are so many things involved; you need a chef, you need ingredients and tools but you also need to engage in various activities like baking or cooking to achieve your end goal.
It is a collection of all these processes and resources that makes it possible for the restaurant to produce a meal that is consistent in taste and quality every time.
The goal of a business system could be to increase profit, productivity or lower costs. whatever the goal, the business owner must be definite on what the system aims to achieve.
There are various types of business systems and sub-systems that are essential to make a business work. Some popular example of broad systems across a business includes marketing and sales system, an operations system, production system, and a financial system.
Why is a Business System Important?
There are a few benefits to gain when you put in place efficient systems for your business.
1. Deliver Consistent Results – Have you eaten at a restaurant and enjoyed the meal only to go there again and order the same meal but get something else? That happened because the restaurant lacks a system. A business with a system would deliver a consistent result every time. Because it has a documented structure that the process of producing your meal must follow no matter the chef.
2. Build People Independent Business – As a follow up to the point about consistency, the business system does not rely on people to deliver great results.
Say your best chef quits, if your business lacks a proper system, the taste of your meals will take a nosedive and it would take another great chef before it rising again.
But that is not the case with a business with systems, your restaurant would produce the same taste to your clients whether you’re there or not or whether someone in a critical role quits. So, a business system reduces the risks affecting your business.
3. Scale With Ease – Many businesses can not grow because, their businesses rely on a critical factor to scale – the owner. But the problem is that the owner is limited and cannot work for the many hours necessary to grow the business. This is where business systems come in. A barbing salon with a system can easily replicate their systems anywhere and employee people to deliver consistent results. But that can’t be said for a business without a system. A good example of a business that has done this McDonald’s.
4. Creates Extra Asset – The truth is that a business system its self is an asset to the business. the billion-dollar franchise market is a testament to that fact. Your business can leverage its system to gain more revenue by selling that system as a franchise to others who may want to replicate your success.
5. Build A Better Business – A business that runs on systems is generally better off; it enjoys lower labour costs, higher productivity and profitability. That is why businesses with systems are more attractive to investors. The business can easily attract capital because shareholders now that they can depend on the system to enjoy returns on investment and growth than on people – no matter how fantastic they are.
Establishing a business system is the obvious solutions to many problems plaguing small businesses today. Do you want to increase your profit, scale your business, leave your business for vacation without it crumbling down? Create a business system.