Business systems are a critical part of owning and running a small business. But what are they? In the simplest sense, systems are processes, or the way in which your business should function. You as the business owner, have a vision in your mind about what works best, how to best serve the customer. And you need a way to convey that to your employees, systems are the way. Now, why are systems so critical yet?
When employees don’t have systems to work with. They tend to do things different every single time which gets us inconsistent results and an inconsistent experience for our customers.
Companies aren’t creatures that develop gracefully under the theory of evolution. Things get messy. Know where you are going, and you’ll get there quicker.
A business process can be imagined with a flowchart as a sequence of activities with interleaving decision points or with a data flow diagram as a sequence of the system’s components.
Systems make it easier to delegate to other people. Often, we delegate something, we tell someone what to do, but they forget how to do it or they may not do it in the right way. This makes it more clear, on what is the way in which you want things to be done.
In your business: you can’t handle all the work alone anymore, and you start sub-contracting. If but the sub-division of roles isn’t clear. You’re doing some of the work, they’re doing other parts, you’ve got increased admin time, so you bring on more sub-contractors. You ask them to handle some work and eventually you get a few of your guys to handle the client relationship themselves. Then your bookkeeping gets fuzzy because you don’t know what the expenses are for or where half the income is coming from, and you can’t get that information easily because you didn’t give your sub-contractors financial reporting procedures.
It’s usually much worse than this in practice, but such confusing problems can be solved with a bit of forward thinking and planning. Why cause such a huge amount of teeth-grinding and misery just by neglecting to map out some organizational structure and operational policies?
Starting now by taking time to plan with the future in mind
Business systems are a powerful tool that you can use to get more consistency and improvement in your small business.
Business owners tend to be verbal creatures, you like to tell people what to do. But most employees need something written, they need a document. Something physical, even a video, will make it become more real rather than just you talking about it.
Business owners need to create common sense by creating an opportunity for employees to hear things repetitively. And to train them over and over, until it becomes second nature. One other problem that we run into occasionally, is that business owners feel like, well, I’ve told people over and over what to do, they should just know it by now. Which is not always true.
Systems are things you can use to delegate responsibilities to other people so that you get consistent performance.
Followings are the suggested list of topics to provide you a starting point for your business process specifications.
Definition of Terms
Description of Process Steps
Business Rules (Enforcement)
Ownership and Stewardship
Responsible, Accountable, Consult, Inform (RACI Chart)
Interfaces with Other Processes (System)
Audits and Compliance
The main idea with the above list is to keep things simple. We’re not going to document every last detail. But, instead, create an outline for training and to help people remember how to do things.
The best people to write the systems are the people using them, the employees. In fact, one of the best opportunities that you’ll have to document systems is when you hire a new employee. At that point you can teach them, verbally, how to do things, and they can document physically what you’re teaching.
What About You? Have you encountered misconceptions about the speed and effectiveness of your work?
Please share your thoughts and experiences in the comments below.