An Intro to Business Systemisation

Firstly, what is business systemisation? Business systemisation is the process of analysing your business, standardising processes, creating operating procedures for your entire business and then following them. There are three main types of systems within a business;
 

• There are hard systems, as in the physical tools that your company uses;
• Soft systems, the methods and practices employed by yourself and your staff to get the job done (i.e. your operating procedures);
• And information systems, the IT processes that pull data about the business and its operations together in order to allow for comparison and selection of best practices

 
To keep this article general for all businesses I will be focussing on the soft systems of a business as the hard and information systems will depend on your business trade.
 
You may now be thinking; “this seems to be a lot of work” or “why should I spend my time systemising my business?”
 
Well there are many benefits; some of which I have already experienced in our business and some that we are still aiming towards. Hopefully you will resonate with some, if not all, of them in your business.
 

1. Efficiencies– by creating and standardising procedures and processes you can create efficiencies in both time and money. For example, in our property business, we have turned 3 bed houses into 5 bed multi-let houses. The first time we did this we recorded the exact specification we required, who we used, where we purchased all of the furnishings and the costs involved. Now the process document for this has made all conversions since and all future conversions simpler. We are able to estimate refurbishment costs quicker and more accurately, we can go straight to our list of trusted suppliers to get work started and deliveries quicker. And more importantly, we are able to deliver the same standard for our investors again and again creating a reliable experience for our customer so trust is gained and repeat business is beneficial to both us and our customer.
2. Scaling up– with systems in place you are more ready and able to scale your business and grow. Not only will it streamline existing processes, but taking on new/more staff will be easier. To share an example; for our e-commerce business we needed to hire a Virtual Assistant (VA) so we could continue to grow. At the beginning of our e-commerce business journey I detailed a full procedure document that had the step by step processes needed to launch new products. However, we did not have the time ourselves to action all of the steps required and we therefore looked to hire. Having a detailed process in place significantly helped our new VA begin working and producing valuable output. I systemised the process of hiring a VA so when it came to hiring one for our property business the process was mostly automated and quick to action. The added benefit of staffing/outsourcing your systemised processes means it frees up more of your time to start working ON the business rather than IN the business.
3. Saleability– whether you want to ultimately sell your business or franchise your business to grow in other areas, systemising your business will greatly increase the value of your business. If your business can run without you there then the attraction for investors to purchase your business, or aspiring business owners to purchase a franchise, is significantly increased as they do not want a business that is going to take them 60 hours a week to grow, nor a business that relies on the owner’s relationships with clients. Another added benefit of setting your business up to sell (even if you are not looking to do so) is that the systems and processes in place to remove you from the day to day running of the business, means you can reduce your hours and have more of a passive income. 

 
Hopefully the attraction of stepping back from the daily running of the business and increasing your business value and profits has got you on the edge of your seat. But where and how do you start this process? With this 5 Step Process:
 

1. Document - The best way to start is to document exactly what you do each day and if you have staff, get them to do the same. Where possible record your actions, whether it is an intricate piece of brickwork or an elongated process on the computer, recording the process will help new and existing staff complete the task.
   
2. Analyse - When you have documented your business processes, it is time to analyse them, order them and see whether there are any efficiencies to be made. You may find staff repeating processes or doing the same process in different ways, or orders for supplies being ordered from different suppliers with varying costs and quality. Until you have your processes written down and can view your business holistically, it is sometimes hard to see those areas that can be improved, especially if you are caught up in the day to day running of the business.  
3. Record - Along with the processes being analysed, data should be analysed. If you are not recording data yet, start as soon as you can. Without data you will not know what areas of your business are most profitable, which clients are most profitable and which strategies result in the most sales etc. Recording and analysing this data will help you improve your processes along with knowing which no/low-profit areas and clients to drop and which ones to focus on. 
4. Manage - With a systemised structure in place it is now time to manage your business. Each process should be looked at individually with the view to either leverage, manage or do. Low value tasks that are time intensive may be better achieved by outsourcing them to another company that specialises in the task and have their own efficiencies making the task cheaper for you. For those tasks that you can not leverage out, you should look to manage them. With clear documented processes existing and new staff should be able to complete these tasks with little to no input from yourself. These tasks should also be tied into their job description along with Key Responsibility Areas and Key Performance Indicators so you can effectively manage them and monitor their progress against the job they should be doing. Finally, those tasks that you can not leverage or manage out, you should do. These should either be tasks you enjoy doing or that are key to the business that you cannot give to staff yet.
5. Improve - The final and ongoing stage to systemising your business is to embed an improvement culture into your business. Every member of your team that is following your operating system and processes should look to improve the processes to reduce time and cost, improve efficiency and improve sales. By embedding this into the culture of your business, staff will feel more valued as they can individually suggest improvements to their work and see them implemented. This will allow your business to advance and grow from not only improved processes but more energised staff.

 
Risk vs Reward
Systemising your business is, unfortunately, no 5-minute task, so for a period you may be taken away from the direct profit making activities of your business. However, you should not let this short term loss stop you from the longer term benefit. Without systemising your business, you may get stuck working IN the business rather than ON the business which could stunt your business growth, make you miss big opportunities and could render your business less able to react to change. 
 
You may also fear a member of your staff taking or someone stealing your entire business’ operating procedures and setting up in competition with you. To counter this risk, it is best not to have one master operating procedure for your entire business but instead have a framework document which refers to different annexes, checklists and processes. Staff will only then be able to access the documents relevant to their work, with staff who gain trust and grow with your company being able to view more of the operating procedures, but maybe still not the entire manual. This will depend on the staff you hire and the type of business you are in.
 
The best time to systemise your business, if you have not done so already, is now! The sooner you begin the easier it will become. There will definitely be some upfront increased effort and time spent on doing this, but if you can leverage this work (using staff or hiring a company to do this) or set some time aside to do this, you will start seeing the benefits sooner.
 
Thank you for reading and I hope that this has been of benefit and given you the drive to grow your business through systemisation. I have briefly covered the aspects of systemising your business and have not driven into all of the detail required at each stage, whilst weaving in some real life experiences. If you would like some further reading on this subject, I can recommend ‘Work the System – by Sam Carpenter’, ‘The E-Myth – by Michael Gerber’ and ‘Built to Sell – by John Warrillow’. Alternatively, if you have any questions, would like to know about training or would just like to get in touch, please email me at stephen@turnerinvest.co.uk.
 
Thanks again,
Stephen Turner