In every business, there comes a time when the ad hoc, one-person operation no longer works. The business is growing, tasks are increasing and the owner is run off their feet every day. They start to wonder if it’s worth it. If this sounds like you, it’s time to implement systems into your business. Business growth is a positive thing – it means you’re doing something right. But without systemization, this growth will be short lived. You won’t keep up with demand and your business will decline. At Vault, our business advisory experts can help you systemize your business to take the burden off you and create a strong base for your financial future.
People really started talking about business systemization after Michael E. Gerber’s 1986 book, The E-Myth (re-released in 1995 as The E-Myth Revisited). The book explains that many people who start businesses know how to do the technical work (‘technicians’) but don’t know how to run a business itself. Everything in the business depends on this one person. This explains why startups fail so often. For a business to survive and grow, it needs systems that reduce the business’s reliance on the technician. One example is the franchise model, which has systems at its core. In-depth documentation and manuals lay out in detail exactly how to run the franchise. Gerber was spot on. For a business to grow, it must be able to run by itself without the owner. The way to achieve this is through systemization.
Systems need to make business processes consistent and predictable. These three systems are essential for business:
Gerber argues that business owners should approach their business as if it were a franchise. In a franchise model, systemization replaces the business owner with a system. The business then runs successfully when they’re not there. This allows the owner to take a breath and focus on the business, rather than always working in the business. McDonalds is often used as an example of this business systemization. It has replicated its systems across the world in most countries across thousands of franchises. As a result, the business provides consistent product and service standards in every location. The McDonalds training program and operations manual – provided to every franchise owner – are key to its successful business systemization.
We’re very lucky to live in a time where technology and the internet make anything possible. Advances in both have made systemization possible for any business owner. You can use technology to create systems for budgeting, procurement, human resources and performance management. The key is to create repeatable systems to manage your business operations, streamline business processes, and give you room to thrive and grow.
Successful systemization can’t be ad hoc – it needs meticulous business planning to ensure that systems work for now, but can also be adjusted as your business grows into the future. Systemizing a business properly takes time and research, but the results can create a solid business that will build a strong financial future for you.