According to author, Michael Gerber, a business is a complex structure of people and business systems that are all evolving at the same time. If you want to turn your business around or take it to new heights, it pays to put more effort in these two areas.
They are the key to sustainable growth and a business that is not completely dependent on you!
Think about your own business. What likely got you to the first $500,000 was not enough to get you to $1 million, unless you made some changes along the way. With so much at stake – more time, money, control and freedom – do your people and processes get the level of attention they should? Here’s a few things to consider:
- When hiring employees or subcontractors, do you have clear goals and written expectations and standards?
- Are routine tasks for each employee documented for easy training and development?
- Does your company deliver what you promise customers – each and every time?
- When someone is out or leaves, can others jump in without difficulty so customer care and other critical tasks are performed with the same level of quality and success?
- Do your people look for ways to improve customer satisfaction or other areas of the business – or view that as your job?
- Could you go on vacation for two weeks without worrying or constantly calling in?
Whether you depend on employees, subcontractors, vendors or partners, the right people are a necessity for most business owners. And if you want those people to be the best they can be, to develop and stick around, you need systems in place to help them.
Where to Start?
As an established business owner, you likely have an existing team and relationships, so let’s start here. Make a list of all your employees, subcontractors, vendors/suppliers and partners.
Employees. Are they a good fit for your business today and moving forward? What skill gaps exist for individuals or your team as a whole. Can these be addressed with training? Is your team open to change and new ways of doing things? With technology today, this is sometimes an area that needs addressing. Does each employee have a current job description with clear responsibilities and expectations? Have individual and business goals been developed, shared and mutually agreed upon?
Sub-Contractors, Vendors & Partners. Do you have the right ones for your business? Is your business too dependent on any one provider, leaving you vulnerable? Are their standards the same as yours? Do you evaluate options periodically to understand pricing and assist in negotiations (even if you plan to stay with current providers)? Have expectations been mutually agreed upon and in writing where appropriate?
While loyalty to people is often a strength in small businesses, it can be a weakness if you are quick to hire and slow to fire. It’s not easy to let go of relationships; you probably view many of them as extended family. But if you are honest with yourself, this can be a powerful exercise – and one that can make a big difference in customer service, growth and long-term profit!
Give People The Systems and Authority to Succeed
I believe most people want to perform well and make a difference in whatever job or task they undertake. I have seen part-timers and minimum wage earners who are worth their weight in gold and highly paid employees who are worthless. It’s all about attitude – and what you, as the business owner, do to help them succeed.
That’s why systems are so important. With documented systems, people know what to do and how to do it. It makes training easier and more effective. New employees can hit the ground running and start to contribute quickly!
Systems also make it easier for all employees to take on new responsibilities or help out others without difficulty. Talk about a great development tool. Equally important, it takes away the stress when someone calls out sick, goes on vacation or leaves to take another job.
To get the most out of your people, make sure you build levels of authority into your systems as appropriate. Levels of authority are simply decision making tools – so individuals can handle customer issues, close sales, resolve problems and keep the business running! It eliminates the need for everything to go through you – the owner – and gives your people a sense of empowerment to do their job. Here’s a few examples to demonstrate this:
Quotes (in sales process). If the quote is under $25,000 with a gross profit of xx% or more, the sales representative may approve and submit the quote directly to the customer. All quotes over $25,000 or with gross profit margins below xx% require approval of sales manager / owner.
Customer service. Representatives may issue credits, refunds or payments up to $100 to resolve customer issues; credits or payments between $101 – $250 require office manager approval. All credits or payments over $250 require owner approval.
Purchasing. Using one of our approved suppliers or vendors, purchasing agent has authority to issue PO’s up to $10,000. Purchase orders over $10,000 require owner approval.
If you are new to building systems in your business, you are probably thinking ‘Wow, this is a lot of work’. It’s not difficult, but it does take time. But with every procedure you document and implement, you begin to see the benefits. Improved efficiency, increased sales, more profit – and a lot less stress!
Take it one at a time. I recommend clients start with a system that will address a common problem – one that helps you make more money, free up your time, causes poor customer service or duplication of effort among your team. What are some common problems that arise often? What are tasks you should delegate but haven’t done so? Pick one and start there.
The right people executing your systems can help transform your business, so give it the attention it deserves.
Leverage Your Business With Systems
If you are serious about leveraging your business with systems but struggle with where to start and how to do it, the 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.
Ready to Put Your Business on the Path to Success?
Would working with a business coach help you take your business to a whole new level? Then let’s explore the possibilities with a complimentary consultation. It’s a chance to get to know each other, discuss your goals and the obstacles that hold you back. Together we can determine if there is a good fit between your needs and my services.
To learn more or schedule an appointment, call me at (856) 533-2344 or drop me an email Joan@HybridBizAdvisors.com