Article written for and published in the July Mensa Business Newsletter
Business systemisation is the process of analysing your business, standardising processes, creating operating procedures and then following them. This article outlines the benefits of systemisation and the simple 5-step process to get you started.
Why systemise your business or role?
Systemisation can create tangible benefits for a wide range of people in business.
Types of systems
There are three main types of systems within a business:
To keep this general for all types of business I will focus on the soft systems.
The other two types will depend on your specific trade. Some of these I have already experienced in the businesses that I own and run and some we are still aiming towards. Hopefully, you will resonate with some of them.
Standardising procedures and processes creates efficiencies in both time and money.
When I worked in a corporate role, I systemised a lot of my role simply by linking spreadsheets directly with the accounting system and other reports from managers. This freed up time to focus on improving other processes that I was managing to keep ahead.
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 quickly and accurately. We can go straight to our list of trusted suppliers to get the work started. More importantly, we were able to deliver the same standard for our investors again and again. By creating a reliable experience for our customers, trust is gained. Repeat business is beneficial to both us and our customer.
Having systems in place means you are 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.
For example, in 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 and we therefore looked to hire.
Having a detailed process in place enabled our new VA to produce valuable output from the very beginning. To take this to the next level, I then 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. If you are working in a corporate role, think about how systemisation could benefit your company. Put together a plan and show the benefits, savings and/or improved sales it will create. Even better, look to systemise your own role and either use the free time for yourself (if you are able to) or create more value for your employer to gain promotion. If you are looking for a change, systemise your- self out of the business and say that the savings made by putting these systems and processes in place will pay for your redundancy package and a lot more!
Whether you want to ultimately sell your business, franchise it or grow in other areas, systemising will greatly increase its value. If your business can run without you, its attraction for investors or aspiring franchise clients is significantly increased. 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 yet) is that the systems and processes in place will allow you to detach from the day-to-day running of the business. This would reduce your hours and create a more passive income.
Systemising your business or role is not a quick task. You will need to take time away from the direct profit- making activities. But don’t let this short-term loss stop you from gaining the longer-term benefit.
Five-Step Process for Business Systemisation
Document exactly what you do each day. If you have staff, get them to do the same. Wherever 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.
Once you have documented your business processes, analyse them and see whether there are any efficiencies to be made. You may find staff repeating processes or doing the same thing in different ways, or orders for supplies being ordered from different suppliers with varying costs and quality. Until you have all your processes written down and can view your business holistically, it is hard to see improvement areas (especially if you are caught up in the day-to-day running of the business).
As well as processes, you should analyse data. 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.
With a systemised structure in place, it is now time to manage. 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 outsourced. A company that specialises in the task will have their own efficiencies making the task cheaper. For those tasks that you cannot leverage outlook to manage them.
With clear documented processes, 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 (KRAs) and Key Performance Indicators (KPIs). You can then 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 yourself. These should either be tasks you enjoy doing or those that are key to the business that you cannot delegate.
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 reduce time and cost, improve efficiency and grow sales. Staff will feel more valued as they can individually suggest improvements to their work and see them implemented. So your business will
advance and grow from not only improved processes but more energised staff.
Risk vs Reward
Systemising your business or role is not a quick task. You will need to take time away from the direct profit-making activities of your business. But don’t 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. Working on monotonous tasks could stunt your career or business growth, make you miss big opportunities and render you less able to react to change.
If you are running a business, you may also fear a member of your staff taking 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. Instead, have a framework document which refers to different annexes, checklists and processes. Staff will only be able to access the documents relevant to their work. Those who gain trust and grow with your company can view more of the operating procedures, but maybe still not the entire manual. This will depend on who you hire and the type of business you are in.
When is the best time to systemise your business or role? If you have not done so already, NOW! The sooner you begin the easier it will be. There will be some upfront increased effort and time spent on doing this work - but you will start seeing the benefits sooner. This is time invested that will continue to pay you back in the long run.
Recommended books If you would like some further reading on this subject, I recommend:
Alternatively, if you have any questions, would like to know about the training we offer to businesses and business owners to help them leverage or would just like to get in touch, please check out the Turner Invest website and contact us.
Empowering People to Live the Life of Their Dreams
Turner Invest Directors Catherine & Stephen Turner