The Secret to Build Profit While You Grow Your Business

Business Systems Build Profit

As most of you know, I’m a big promoter of business systems.  For a business owner, they make life easier, drive profitability and leverage your business so it works for you.

Now I must admit, I wasn’t always a systems advocate.  In fact, early in my corporate career, I rarely gave them a thought until…

I joined a start-up business as the Director of Marketing.  At that time, we had zero customers, no staff, and no systems.

  • Hiring people was easy; training them without systems was more complicated.
  • Building a plan to get customers was easy; having others consistently implement the strategies was more challenging without procedures.
  • Defining the perfect customer experience was easy, delivering on our promise time and again was more difficult without proper methods in place to make it happen.

I think you get the point.  All of us in this ‘new’ company understood the need for business systems and written procedures, but we had a business to build – we needed revenue!  Sound familiar?  It should since you, as a business owner, have the same challenges.

So what was the secret to creating written procedures while building the business to $80 million in less than 4 years?

  • Set the right goal.  Setting a goal to complete a ‘how to’ manual is just plain boring and overwhelming.  Instead, set a goal to build systems into your business – as you are building it.  You will eventually end up with a practical, how-to manual – but you’ll build profit and efficiency along the way to keep you motivated.
  • Take it one procedure at a time.  For every system you document and implement, you will see improvements in efficiency, productivity, and profit.  So you don’t need to reach the end of the project (a how-to-manual) to see results – more sales, more customers, more profit – and yes, more control and freedom.
  • Start with the most critical.  Business systems, like customers, are not created equal.  Focus first on the ones that impact YOUR sales, delivery, profit and time.  Two factors you need to consider.  First, consistency – is the procedure being performed the same way by all involved?  Second, effectiveness – is it delivering the outcome or results you want?

Here’s an example.  You have a sales system that is documented so everyone does it the same way.  But if your process doesn’t help you achieve a better outcome – more sales or a higher conversion rate – then it’s consistent but not effective.  In your business, you want both!

  • Keep it simple.  Procedures must be understood by those who implement them if they are to deliver consistent results.  Include scripts, checklists, and samples where appropriate to help people perform the task at hand.
  • Include limits of authority.  Written procedures will explain what to do and how to do it.  But some tasks such as preparing a quote, closing a sale, paying vendors or resolving a customer complaint may require you to spell out how much authority others have to complete these tasks.  Limits of authority empower others (with limits) so tasks get done without you – while also reducing potential risks (aka bad decisions).

Here’s a common example.  If quotes are needed to close a sale and timely response plays into getting the business, you don’t want approvals to become a bottleneck.  With guidelines, only proposals that fall outside the parameters you set need to be held for your approval. Therefore, your quote process may include language such as “All quotes or proposals over $5,000 OR under 35% gross profit margin require owner review and approval”

If you really want less stress, more profit and the freedom to come and go or take time off,  then make systems more of a priority.  Take it one at a time and “build as you grow”.  It’s not hard, you simply need to kill the excuses.

Get Serious About Systems

If you are serious about leveraging your business with systems but struggle with where to start and how to do it, then check out my Ultimate Systems and Procedures Guide. Designed specifically for small business owners, my step-by-step guide with templates and examples makes it easy to do it yourself.