Welcome back to our seven-part Business Success Series- a comprehensive guide designed specifically for small and medium-sized enterprise (SME) owners who are committed to achieving their business goals and overcoming challenges. So far, I’ve discussed the importance of having the right mindset, why it’s critical for businesses to have Purpose, Values and Goals, key elements of securing Profitability and Cashflow, why Sales and Marketing are central elements to successful businesses and the importance of the right Team and Culture. This time around I’m going to look at the role that having systems and processes play for businesses.
ALL successful businesses are based on systems and processes
Now, whilst it’s probably one of the least appealing things for most entrepreneurs to consider, ALL successful businesses are based upon sound fundamental systems and processes.
If your business relies heavily on certain people to carry out certain tasks or has a lot of manual, labour intensive tasks, the chances are that your systems and processes could be developed.
Business systems can be referred to as ways to; Save Your Self Time Energy and Money
Learn the art of empowering
Business owners sometimes imply that they should fully focus their efforts into growing their businesses as that is more important than documenting how things are done- which can be quite a boring task.
To this, I’d say that growing and scaling your business without having and systems will create mayhem as you may not have the ability to deal with the additional sales and the all-round growth. Issues you have now will likely magnify as your business grows. In a way this can be seen as taking a step back in order to allow you to take 10 steps forward, as opposed to 1 or 2 steps forwards and then 10 steps back in the long run.
It doesn’t have to be the case that as the business owner you have to be the one to put the systems together yourself. If you can find yourself a systems champion within the business, you can empower them to put it together and you can simply review it. Remember, sensible delegation saves you valuable time.
Ideally your systems would all be in place already… but we don’t live in a perfect world.
For the businesses who need some work on their systems, I’d first recommend working out the areas that you like the least and find most time sapping. It’s the inconsistent, and generally least productive areas that are likely to yield the best results as these are probably the areas that you focus on the least from a systems perspective.
The McDonalds example of business systems:
If you look at McDonalds which is one of the largest and most well know businesses in the world, their whole model is centred around systems and processes that are clear and easy to follow.
They basically created the system for making fast food of consistent quality, quickly and they did this by putting a fool proof system in place. This allowed them to magnify and franchise quickly and enabled people from all walks of life to get involved and become successful, with one condition:
They follow the system…
A film has been made about this recently called ‘The Founder’ – if you haven’t seen it, I recommend a watch as it is a really interesting story and touches on lots of different business subjects.
But what is the difference between a system and a process?
A good way to think of it is that a system is a component of the business, and within that system there are a number ofprocesses to make the system work. For example, your businesses business development system may be made up of various aspects:
- You may have a lead generation system
- Your marketing system
- And your customer care system
Within each of these systems there will be several processes which if followed will allow you to be consistent every time.
These systems do not have to be 100-page long manuals- often I find that checklists, flowcharts or video guides work just as well or even better.
At Nordens we use Loom internally for some of our “How to’s” and it works really well, especially as it has an ability to transcribe what you are saying so you get the best of both worlds, and we find that people can often understand things they see in action better than a worded manual. The key thing is that it needs to be clearly defined so someone could follow the steps and understand how they flow through to the end goal.
Another benefit of building a system and process in the segments of your business is that it enables you to critically evaluate whether that particular process is necessary and why. This should help you to dispose of activities that are not resulting in enough benefit ordon’t motivate you enough.
Once a system has been built it needs to be regularly tested and updated to keep up with the ever-changing landscape. It’s important to keep innovating with this as you will prosper where you competitors become complacent and do not do this. Without regular testing you are at risk of running an inefficient or even obsolete system which in some cases can be worse than not having a system at all. Regular testing will also ensure you stay as lean as possible and often building and testing the business systems generate those light bulb idea moments you can capitalise on.
Using digitalisation to develop your business systems and processes
Technology has developed and evolved here in a big way and allows businesses to put systems in place quicker and easier than ever before, creating faster and easier efficiencies. Those that are embracing this are striving ahead of those that are not. There is also huge scope to now digitalise your business like never before, trimming back and even eliminating some of your legacy systems and processes.
You do have to be careful here and diligently weigh up the cost vs benefit of implementing various technology into your business. Don’t just blindly go out there and start trying to use everything- like we allude to above, target the biggest time sapping area or area that a change will deliver the highest value, and shortlist the technology products that you feel are most appropriate. Being clear on what you want the technology to create (or eliminate) is crucial here, as it allows you to weed through products that are not the right fit and only continue conversations with those providers who can serve your needs fully.
Digitalisation is something we have worked on here at Nordens and the first project has saved us over a day a month in administration time alone. It takes a bit of time to put in place initially, but the time savings are recurring, so it really becomes a no brainer, as you strive to be as lean and efficient as possible.
I came across a publication recently which states business owners should:
- Spend 60% of their time visualizing growing the business including winning new work and building relationships with existing clients
- 30% of the time carrying out high value work
- 10% of the time leading and communicating the vision throughout the organisation and driving its overall performance
Often it is the case that the owner is spending a lot more than 30% of their time doing the work which hampers their ability to grow the business and progress to the longer-term goals. This is exactly where systems and processes being in place can start to help you readdress this balance.
We’ve been through a similar process at Nordens where our founder Mark Norden was originally the go-to person for everything until he made the decision to work with myself to systemise our processes. This allowed myself and other members of the team to take away some of his workload. We’ve followed this idea and developed our internal systems from this point onwards, seeking input from the rest of our team as this achieves the feeling of building something together and enhances the buy in.
Make sure your business systems and processes are independent of you
The final thing to home in on is that the quality of businesses systems and processes are directly correlated to the underlying value or worth of your business. In the past many business owners have looked to exit their businesses only to find that much of the information on the systems and processes is tied to themselves. This can mean that since so much information is held in their heads, unless they aren’t physically present the business doesn’t function properly and experiences a huge downgrade in value. It’s therefore so important that the systems and processes can exist independently and not be tied to a particular person in the business.
Business Systems and Processes: Frequently Asked Questions
1. Why are systems and processes crucial for business success?
Successful businesses rely on sound systems and processes to ensure consistency, efficiency, and scalability. Without them, growth can lead to chaos as existing issues magnify with increased sales and operations. Developing these frameworks allows for smoother operations and prepares the business for sustainable growth.
2. How can I start developing systems and processes in my business?
Begin by identifying areas that are inconsistent or time-consuming. Focus on the tasks you least enjoy, as they often yield the best results when systematized. Delegating the creation of these systems to a “systems champion” within your team can save you time and ensure effective implementation.
3. What’s the difference between a system and a process?
A system is a broad component of your business, like marketing or customer care, composed of several processes. Each process within a system details specific steps to achieve consistent outcomes. For example, a marketing system might include processes for lead generation, content creation, and social media management.
4. How often should business systems be reviewed and updated?
Regular testing and updating of your systems are essential to keep up with changes and maintain efficiency. This prevents systems from becoming obsolete and ensures your business stays competitive. Continuous innovation in your processes can also lead to new opportunities and improvements.
5. How can technology aid in developing business systems and processes?
Digitalisation simplifies the implementation and management of business systems, offering tools that streamline tasks and enhance efficiency. It’s important to evaluate the cost-benefit of new technologies and target areas where they can add the most value. Properly integrated technology can save time, reduce manual labor, and improve overall business performance.
Systems and Processes: An essential part of any business
So, while we appreciate systems and processes are far from the most ‘fun’ part of business, they are definitely one of the most essential factors if you are serious about growth and building underlying long term value
How we can help
At Nordens Chartered Accountants, we offer expert advice and assistance helping your business to develop systems and processes that enable you to achieve your goals.
If you need assistance with this or any other accounting services, look no further than Nordens Chartered Accountants. Contact us today at 0208 530 0720 or fill out our contact form to schedule a consultation.
