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Do Systems Run Your Business?

Written by: David Carter

Article Overview: Do these issues look familiar in your business: Staff turnover, can’t hire good people, missed due dates, reactive environment, poor cash flow, long and hard hours, poor customer retention, confusion, duplicative effort? If so, what do you think is the common cause? The answer is lack of systems in your business. Here is wisdom! Your business is your product; it’s what you are building, and it’s where you are ultimately going to make your profit when you sell it. And, systems are the foundation of your business.

Do Systems Run Your Business?

Do these issues look familiar in your business: Staff turnover, can't hire good people, missed due dates, reactive environment, poor cash flow, long and hard hours, poor customer retention, confusion, duplicative effort? If so, what do you think is the common cause? The answer is lack of systems in your business.

Systems are often the most misunderstood area of business today. Yet they are easy to implement and make your life and that of your staff so much easier. Systems will make your business run smoothly, efficiently and profitably!

Another way to understand the importance of systems is to ask yourself this question: Do I work more ON my business than I work IN my business? A successful business is a "commercial, profitable enterprise that can work without you." Systems allow your business to work without you. If you work more IN your business than ON it, your business will never grow and prosper, and it will not reach its full potential.

Your business is your product; it's what you are building, and it's where you are ultimately going to make your profit when you sell it. And, systems are the foundation of your business.

The basic principle is to "systematize the routine and humanize the exception." Anything that can't be systematized needs to be run by people. Always look at putting a system in place rather than employing more people. A systems means that things are done consistently, irrespective of which team member is responsible.

Therefore:
- Systems run your business
- People run your systems
- You lead your people

There are five basic steps to systematization:

1. Document your company structure by creating an organization chart. Then identify the critical areas or functions for your business to be a success.

2. Next, for each critical area or function, flowchart your processes. Describe with detail and accuracy exactly what happens in each area. Chart the path that works through each area.

3. Document how it gets done. Involve your team. Have the team member who is currently doing each job write down every step in performing a task. Then have a new person do the task with the draft written steps. If the team member currently doing the task has to step in and explain anything to the new person, then add steps or clarify. Once completed start again until any person can do the task without intervention.

4. Measure using key performance indicators. Typically, these will be the top measures that show system performance. Get these measures from the person doing the job. For example, for your sales system you can use the number of leads generated, conversion rates, or average dollars per sale.

5. Allow the system to change and grow with use. Ensure that the system is self-correcting and can evolve by itself. Make sure team members keep the system documentation current.

Some final tips:
- Don't over complicate systems or people won't follow them.
- Use lots of photos, videos, tapes, etc. This may be as simple as printing a computer screen or video taping someone doing the task at hand. This will make the systems much easier to follow.
- Document your system in a "policies and procedures" or "operations" manual in an easy to access format. And make sure everyone knows where it's kept!

As your business continues to grow, effective systems will be paramount to your long term profitability, good work-life balance, and a great lifestyle for you and your family. Here's to your continued success!

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Article Tags: business systems



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