Business systems: The key to business success

Business systems are composed of detailed procedures that business owners can replicate for consistent, measurable results. Business owners who implement these systems can free up valuable time to work on their businesses—not in them.

As businesses across industries struggle with the COVID-19 pandemic, many business owners are discovering holes and gaps in their daily operations. These entrepreneurs are seeking ways to overhaul their processes. Business systems may be the key to solving many of their current problems.

According to Michael E. Gerber, author of “The E-Myth,” the core components of business systems are key to business growth. In a recent interview with QuickBooks, he explains why business systems are the solution to virtually all common problems small business owners encounter.

According to Gerber, every frustration in your business is the result of a lack of a system. If you had a system, you wouldn’t be frustrated, and you could meet all of your business needs. If you’re managing every aspect of your business, you may spread yourself thin. It’s time you could spend attracting more clients, boosting profitability, or scaling your company. A business built on systems is one that doesn’t depend on you to be there to succeed.

Bottom line: Business systems can bring consistency to your business activities. Consistency allows you to focus your efforts on your business goals.

What is a business system?

A business system is a group of interdependent elements or tasks that meet a business objective. You should document every step for each business process or activity.

Business activities consistently produce results. Strategizing how you complete these tasks can help streamline daily operations. Business activities may include:

  • Lead generation
  • Prospect conversion
  • Invoicing
  • Accounting
  • Bookkeeping
  • Marketing
  • Sales
  • Operations
  • Order fulfillment
  • HR
  • Training
  • Payroll

Business systems connect an organization’s departments, steps, and strategies, turning your internal operations into a well-oiled machine. With a cohesive system, all parts of your company work together to achieve your overall business strategy.

  • Ultimately, business owners who create and maintain business systems can scale their businesses without daily input or check-ins.

The benefits of business systems

Running a business is time-consuming. Business systems can provide a plethora of benefits for business owners looking to scale their efforts, free up valuable time, and produce real results. Systematizing your daily operations can yield five benefits.

1. Greater freedom

Many business owners are their company’s Chief Doer, but they never relinquish that role. Gerber says holding on to that control can be a fatal mistake for an organization looking to grow. Business owners must be willing to hand over the reins to their team members. Systems are the framework through which business owners can delegate tasks.

Strategizing and implementing the appropriate business systems can help you scale your business and free up time to work on your business. Use the “working on versus working in” theory to devote your time and energy to activities that can help your business grow. Don’t just focus on the daily operations that merely sustain current success.

Systematizing your business means spending more time growing it and less time running it. Are you going on vacation? Enjoy your break, knowing work will get done. Do you want to focus your efforts on acquiring new skills essential for building your organization? Business systems will help your team complete their initiatives while you’re out. Streamlined procedures can provide much-needed peace of mind when you’re not there to do things yourself.

2. Better delegation

96% of business owners are reluctant to delegate, according to a QuickBooks Live Business survey. Gerber says the failure to delegate can make it impossible to grow your business. Gerber indicates that nothing is off-limits when it comes to delegating a business owner’s responsibilities.

“Business owners should give everything up,” Gerber says. “And when they give everything up, they begin to understand what they shouldn’t give up. So until they give up everything, they will never understand what they shouldn’t give up.”

However, Gerber explains, business owners shouldn’t give up responsibilities without developing systems that produce results. Gerber uses Ray Kroc as an example. Kroc joined McDonald’s in 1954. And his efforts transformed McDonald’s into a global multibillion-dollar corporation.

“[Kroc] delegated the management work, and he delegated the leadership work,” Gerber explains. “And each of those plateaus of work is a different form of work. And every one of those forms of work was a system that effectively worked again and again and again. He could depend upon them to work in the hands of people who were authoritatively transformed by using the system that worked.”

The above illustrates how business systems streamline delegation. Workers can memorize and apply a dedicated system for a given business process, ensuring they do the job correctly. Furthermore, you can create these systems for virtually every facet of your business and turn new hires into capable team members.

3. Improved consistency

The right business systems can ensure your team produces the best results every time, with or without your involvement. Creating systems with detailed, sequential steps can help your employees follow appropriate procedures and produce the same caliber of product or service. Process improvements can enhance customer experience, streamline product development, and marry previously siloed parts of your business.

4. Added value

Do you plan to scale your business and sell it down the line? A streamlined business may have a competitive advantage when it comes time to sell. Your organization may be more valuable if you can show how your business systems provide tangible value.

Buyers will be looking for robust systems that show the business will flourish after you depart. Systematizing your procedures today can pay dividends in the future. Channeling your business processes into cohesive systems can help it grow and endure.

5. Focused talent

Build business systems on delegation. Matching the right tasks to the right individuals in your organization allows your staff to focus on what they do best. Assign team members with specific knowledge and skills to tasks that suit them best. And delegate the right responsibilities to new hires from day one. Matching tasks can lead to process improvements that enhance efficiency and turn your organization into a well-oiled machine.

COVID-19 and business systems

Most business owners have faced new challenges due to COVID-19. But Gerber doesn’t believe the current pandemic is the crux of the problem. He claims, around 550,000 companies close their doors for good each year—pandemic or not.

“The tragedy of the pandemic… is not the tragedy that businesses have to confront,” Gerber explains. “[It’s] the lack of understanding of what a business is, how one must work in order to grow effectively… and how to truly pass over the kinds of frustrations that every single small business owner has.”

Ultimately, Gerber argues that business systems can help small businesses weather any situation, including pandemics. Business systems and procedural changes can transform your daily efforts in the face of the current pandemic and beyond. From marketing systems to accounting systems, streamlining various areas of your business can yield great results.

Watch the full interview with Micheal E. Gerber

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