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Why A Lack Of Systems Is Stunting Your Business Growth And Costing You A Fortune

Business systems are by far the most overlooked aspect of running a successful small, medium, or large business.

We’re going to look at what they are? Why you need them? And how they can help you build massive value in your business?

DO YOU WANT TO GROW YOUR BUSINESS RAPIDLY?

Then you need to market it. But not just any marketing will do. In my new 1-Page Marketing Plan Course I show you the exact techniques I've used to start, grow, and exit several multi-million dollar businesses, so you can too.

WHAT ARE BUSINESS SYSTEMS?

In short, business systems start with documented procedures and processes that allow your business to run without you.

This is often referred to as an operations manual. Its purpose is to capture the collective “know-how” of the business.

The poster child for business systems is McDonald’s. This is a complex, worldwide, multi-billion dollar business essentially run by pimply teenagers. Kids who can’t even be trusted to make their beds.

How do they do this?

They run this hugely successful and profitable business because they have amazing business systems. Their operations manual covers everything from hiring to product delivery to customer interaction.

WHY BUSINESS SYSTEMS ARE OFTEN OVERLOOKED

There are two major reasons why business systems are overlooked by many small business owners. And you really don’t want to make these expensive mistakes.

Reason #1

Business systems are regarded as “back office” functions. Unlike the latest marketing strategies, sales techniques or other highly visible aspects of your business, good business systems are considered by some as boring.

While building them may indeed be boring, the incredible power they give you is anything but.

Reason #2

Business systems are neglected because of a perceived lack of urgency. When a business is small or just starting out, there are seemingly more important things to do. Things like sales, marketing and order fulfillment.

With all of these important things vying for the business owner’s attention, systems get put off. However, just like any other accumulation of neglect over time, it rarely ends well.

FOUR REASONS WHY YOU WANT SYSTEMS IN YOUR BUSINESS

It’s a sad situation when a business owner goes to sell their business and finds out after putting in many years of hard work, that their business is worthless.

It’s not so much that the business itself is worthless, it’s that they ARE the business and without them there is no real business to sell.

In cases like this, they can’t sell it for any kind of reasonable sum beyond the value of their stock and maybe a small, nominal amount for “goodwill”.

There are numerous benefits to implementing systems in your business. Here are some of the most important.

1) It builds a valuable asset. 

It’s nice if your business gives you a great cash flow to fund your lifestyle. But wouldn’t it be fabulous if one day when you decided it was time, you could sell your business and have the biggest payday of your life?

You can only do this if you build the value of the business. And that can only happen if it’s a system that can continue running without you. Yes, you need marketing assets, but systems are where the money is made.

2) Leverage and scalability. 

Systems give your business the ability to expand. You can replicate your business in other geographic areas. You can do this yourself or by franchising or licensing the rights to your business system. Many fortunes have been made this way.

3) Consistency. 

Consistency is one of the keys to delivering an excellent customer experience. You may not like the food at McDonald’s but wherever you go they deliver a consistent experience.

4) Lower labour costs. 

Systems mean you don’t have to waste time and effort re-inventing the wheel each time. This improves your efficiency and reduces your labor costs.

YOUR BUSINESS AND YOU

Let me ask you a question. If you went overseas for six months leaving your business behind, would it be in better or worse shape when you come back?

Would you even have a business left?

If you answered negatively to either of these questions, then it’s likely you don’t have a business. Rather, you ARE the business.

Many small businesses, especially sole operators, make the mistake of not thinking about systems. After all, the business is small and the founder or founders perform all roles.

Unfortunately, this thought processes dooms them to staying small and remaining a prisoner in their business.

They often find themselves in a catch 22 situation. They have no time to work on the business because they’re too busy working in the business. 

They can’t get away from the business because they haven’t developed documented systems and processes.

So they’re stuck in a business that’s become a self-made prison.

Don’t get me wrong, they may be financially successful. Their business may be thriving with a loyal base of customers. But the problem is they are stuck – shackled to their business.

If they were to leave or get sick for an extended period of time, their business would cease to exist. So ask yourself, why does your business exist?

LEVEL UP YOUR BUSINESS

Remember, the problem about not having systems is that all the “know how” of the business is stuck in a silo between their entrepreneurs’ ears.

The only way out is to make time to create and document these business systems.

Thankfully this daunting process is not that difficult when we break it into chunks. Start with building your marketing plan. Get your messaging right. Then review which systems you need to level up your business.

In our next article we’ll start this process and go through some of the practical first steps of creating documented business systems.

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5 thoughts on “Why A Lack Of Systems Is Stunting Your Business Growth And Costing You A Fortune”

  1. Allan, thank you for the wonderful article. It is an eye opener. I have been a prisoner in my own business. Scared of getting sick. Just last week i begun putting things right imagine after 5 yrs of operation. I am glad i just read this.

    Emma

  2. I have a small fast food restaurant. I want to learn how to make it work with out me being there can you help? right now am only one that does everything from cooking to selling, Everything teach me PLEASE

  3. While this article refers to Business Systems in the general sense – machinery, software systems and even paper documented processes, it speaks exactly to the premise of my software business! I build custom mobile software systems – built to fit the business not the other way around. It is so true to get the value out of the software system, users need to be able to seamlessly operate within the various areas of the company. You cannot get that with all of the free or inexpensive tools where you have to constantly flip from one tool to another and even sometimes enter the same info multiple times. Efficiency is key to be able to allow the employees to focus on the portions of the business that software (or any system) cannot help with but are important for the growth of the business. With efficiency, the business can chip away daily at increasing the growth which will make a tremendous difference year over year!!

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