There are different types of business systems and subsystems. A few core ones you find across several businesses are explained below: –
– Marketing system – The marketing system has a central goal of attracting leads and creating awareness for your business and products. Some subsystems under this are; email marketing system, social media marketing system, cold calling system, etc.
– Sales System – the sales system aims to convert leads to sales. Under the sales system, various processes and requirements work together to achieve the goal.
– Production system – Under the production system, various processes and resources work together to convert raw materials into finished products.
– Administration system – The goal of this system is to support other systems within the business. It consists of subsystems such as the financial system, payroll system, order fulfilment, etc.
Five (5) Steps to Create Business Systems
Now, to the practical steps, you need to build systems for your business.
Step 1 – Start with a Specific Business Activity/Issue
The first step to creating your business system is to start with a small activity in your business such as customer service or start with an issue you want to resolve in your business-like poor customer service for instance. Whatever activity or issue you choose, narrow it down to the simplest business activity or issue and define its goal.
Step 2 – Break the Activity into Components.
The next step after identifying the activity is to break it down into four components that make up the business system. These are process, people, tools and strategies.
For a system to be complete, you need to complete these components. Here is a brief definition of each of the four components of a business system:
Process – This is an activity or activities that you have to run to ensure that a system performs efficiently.
People – This component answers the questions, of the type of skills and people needed for the system to function.
Tools – These are the equipment a business needs to support different parts of a system. Like checklists, documents and materials, etc.
Strategies – Here, you define your plan of action to achieve the objectives of your system.
Here is an example, say you’ve chosen your order fulfilment system, how would you go about breaking down the activity into components?
Order Fulfilment System
Receive the order. Confirm payment.
Check for availability of items ordered Package the order.
Deliver the order for shipping.
Confirm receipt by the customer.
Store manager – responsible for confirming the availability of items ordered and providing them
Fulfilment officer – responsible for receipt of the order, packaging and delivery
Bookkeeper – responsible for confirmation of payment
Delivery personnel – responsible for delivering the items ordered in good condition
E-commerce platform/Excel sheet/email service, etc.
You can use software to make the process seamless and efficient.
Step 3 – Documentation
The next step is to document your system. After the second step, you can document your system in various formats like video, audio or text. You can also make it visually appealing and easy to understand by representing it in a flow chart.
How you document your process and system is as important as what is documented. Be sure to document it in a format that is easily accessible by everyone involved.
Step 4 – Review and Standardize the System
The participation of all stakeholders affected by the system is important. This will unearth insights and recommendations you need to review your system in tune with reality and in a way makes your employees feel represented.
As you receive insights from employees, it also helps to compare how your business is currently carrying out these processes with how other businesses are doing theirs differently. This is important to give a sense of direction on how your system should be.
Seek opportunities for improvement, remove unnecessary activities, automate where possible. In the end, you should have a final standardized version of how your business system should run and the goals it should achieve going forward which you should communicate to stakeholders.
Step 5 – Measure the Performance and Optimize.
The process of business system improvement is a continuous one.
And it cannot be done if the performance of the system is not measured.
So, set relevant key performance indices like cost savings, revenue or lead generation, etc. And track them over time to identify their performance and improve.
Pro Tips to Note: –
Communication is key – Always communicate with stakeholders involved this the process. It is key for feedback and employee buy-in during the implementation.
The documentation of your system must be in a format that is easy to access and review by stakeholders involved.
To enjoy the benefits of a system, the business must have an organizational discipline to follow the standardized operating procedures.
PS: Do you need help with building systems for your business? Schedule a meeting today!
The SME Coach empowers entrepreneurs with training, events and resources, specially designed for purpose-driven small and medium enterprises to grow into sustainable and self-managing businesses, that give their owners the income and freedom to enjoy real financial independence.