E-Class #49: How to Systemize Your Business

Checkpoint:

You have identified areas of your business or your marketing where you are unnecessarily discounting.
You have chosen a marketing strategy to replace the discount and are measuring the results.

Are you working on your business or in your business?

One of the biggest mistakes you can make as a business owner is to create a company that is dependent on your daily involvement for its success. This is what I call working “in” your business. You’re writing basic sales letters, licking stamps, and guiding staff step-by-step through each task.

There are a number of problems with this approach. One is redundancy. You’re paying your staff to carry out tasks that you eventually complete. The second is poor time management. You’re spending your day – at your high hourly rate – on tasks as they arise, leaving little room for the tasks you need to be focused on.

The solution here lies in effective systemization of your business. Clearly established policies and procedures that empower your staff to take on the responsibility of running daily operations.

Systemization also contributes to cost management and your profit margins. Assuming that you take home a greater salary than your staff members, it costs your business more for you to complete tasks in comparison to the other capable individuals who work for you.

Besides, do you really want to be licking stamps every day?

In this E-Class we will cover:

Why systemize your business?
The benefits of business systems
How to take stock of your existing – or lack of – systems
Seven areas of your business you need to systemize
How to create and implement new systems

Why Systemize?

A system is any process, policy, or procedure that consistently achieves the same result, regardless of who is completing the task.

Clear systems will free you from the day-to-day functioning of your organization. Your company will run more smoothly, turn a higher profit, and provide a higher level of service – regardless of your involvement.

Any task that is performed in your business more than once can be systemized. Ideally, the tasks that are completed on a cyclical basis – daily, weekly, monthly, and quarterly – should be systemized so much so that anyone can perform them.

Systems can take many forms – from manuals and instruction sheets, to signs, banners, and audio or video recordings. They don’t have to be elaborate or extensive, just provide enough information in step-by-step form to guide the person performing the task.

Systemizing your business is also a healthy way to plan for the future. You’re not going to be working forever – what happens when you retire? How will you transition your business to new ownership or management? How will you take that vacation you’ve been dreaming of?

Businesses that function without their ownership are also highly valuable to investors. Systemizing your business can position it in a favorable light for purchase, and merit a high price tag.

There are seven general areas of your business you can potentially systemize.

Administration

This is an important area of your business to systemize because administrative roles tend to see a high turnover. A series of systems will reduce training time, and keep you from explaining how the phones are to be answered each time a new receptionist joins your team.

Administrative Systems

Opening and closing procedures
Phone greeting
Mail processing
Sending couriers
Office maintenance (watering plants, emptying recycle bins, etc.)
Filing and paper management
Workflow
Document production
Inventory management
Order processing
Making orders

Accounting

This is one area of systems that you will need to keep a close eye on – but that doesn’t mean you have to do the work yourself. Financial management systems are everything from tracking credit card purchases to invoicing clients and following up on overdue accounts.

These systems will help to prevent employee theft, and allow you to always have a clear picture of your numbers. It will allow you to control purchasing, and ensure that each decision is signed-off on.

Accounting Systems

Purchasing
Credit card purchase tracking
Accounts payable
Accounts receivable
Bank deposits
Cutting checks
Tax payments
Profit / loss statements
Invoicing
Daily cash out
Petty cash
Employee expenses
Payroll
Commission payments

Communication

The area of communication is essential and time consuming for any business. Fax cover letters, sales letters, internal memos, reports, and newsletters are items that need to be created regularly by different people in your organization.

Most of the time, these communications aren’t much different from one to the next, yet each are created from scratch by a different person. There is a huge opportunity for systemization in this area of your business. Systemized communication ensures consistency and company differentiation.

Communication Systems

Internal memo template
Fax cover template
Letterhead template
Team meeting agenda
Sending faxes
Internal emails
Newsletter template
Sales letter template(s)
Meeting minutes template
Report template
Internal meetings
Scheduling

Customer Relations

Another important area for systemization is customer relations. This includes everything the customer sees or touches in your company, as well as any interaction they might have with you or your staff members.

Establishing a customer relations system will also ensure that new staff members understand how customers are handled in your business. It will allow you to maintain a high level of customer service, without constantly reminding staff of your policies. It will also ensure that the success of your customer relations and retention does not hinge on you or any other individual salesperson.

Customer Relations Systems

Incoming phone call script
Outgoing phone call script
Customer service standards
Customer retention strategy
Customer communications templates
Sales process
Sales script
Newsletter templates
Ongoing customer communication strategy
Customer liaison policy

Employees

As I showed you in an earlier E-Class, your need to create systems in your business for hiring, training, and developing your employees. This will establish clear expectations for the employee, and streamline time consuming activities like recruitment.

Employees with clear expectations who work within clear structures are happier and more productive. They are motivated to achieve ‘A’ when they know they will receive ‘B’ if they do. Establishing a clear training manual will also save you and your staff the time and hassle of training each new staff member on the fly.

Employee Systems

Employee recruitment
Employee retention
Incentive and rewards program
Regular employee reviews
Employee feedback structure
Staff uniforms or dress code
Employee training
Ongoing training and professional development
Job descriptions and role profiles

Marketing

This is likely an area in which you spend a large part of your time. You focus on generating new leads and getting more people to call you or walk through your doors. These efforts can be systemized and delegated to other staff members.

Use the information in this program to create simple systems for your basic promotional efforts. Any one of your staff should be able to pick up a marketing manual and implement a successful direct mail campaign or place a purposeful advertisement.

Marketing Systems

Referral program
Customer retention program
Regular promotions
Marketing calendar
Enquiries management
Regular advertisements
Advertisement creation system
Direct mail system
Sales procedures
Lead management

Data

While we like to think we operate a paperless office, often the opposite is true. Your business needs to have clear systems for managing paper and electronic information to ensure that information is protected, easily accessed, and only kept when necessary.

Data management systems help you keep your office organized. Everyone knows where information is to be stored, and how it is to be handled, which prevents big stacks of paper with no place to go.

Ensure that within your data management systems you include a data backup system. That way, if anything happens to you server or computer software, your data – and potentially your business – is protected.

Data Management Systems

IT Management
Data backup
Computer repairs
Electronic information storage
Client file system
Project file system
Point of sale system
Financial data management

Start by taking stock of your existing systems – if you have any – and identify how you can make simpler or more straightforward.

The first step in systemizing your business is taking a good look at the existing systems in your business. At this point, you can look for any informal systems that you might just call “the way we do things here.”

How do your staff answer the phone? What is the process customers go through when dealing with your business? How are employees hired? Trained? How is performance reviewed or rewarded? You can use the lists above to help brainstorm all the activities that happen in your company.

Some of your systems may be highly effective, and not require any changes. Others may be ineffective and require some reworking. If you have previously established some systems, now is a good time to check-in and evaluate how well they are functioning.

Use your notepad to create a list of systems that currently exist in your business. If you do not have any systems in place, this is a good time to brainstorm some systems your business may need.

Think about repetitive tasks that you and your managers undertake regularly, or tasks that you have been putting off training others to do. You may need to get a better understanding of the tasks that you and your employees complete on a daily and weekly basis.

If you operate a timesheet program, this can be a good source of information. Alternately, ask staff to keep a daily log for a week of all the tasks they contribute to or complete. Doing so will not only give you valuable insight into their how they spend their time on a daily basis, but also involve them in the systemizing process.

Review all task logs or timesheet records at the end of the week, remove duplicates, and group like tasks together. From here you can categorize the tasks into business areas like the seven listed above, or create your own categories.

System Group	Existing Systems
Administration
Accounting
Communication
Customer Relations
Employees
Marketing
Data

Then, you will need to prioritize and plan your system creation and implementation efforts. Choose one from each category, or one category to focus on at a time. The amount you can take on will depend on your business needs, and the staff resources you have available to you for this process.

Remember that system creation is a long-term process – not something that will transform your business overnight. Be patient, and focus on the items that hold the highest priority.

When you have identified all the areas in your business that need systemization, you need to create, test and implement new systems

1. Create each system using step-by-step instructions that make sense for the people who will be using it.

There is a big variety of ways you can create systems for your business – depending on the type of system you need and the type of business you operate. Some systems will be short and simple – i.e., a laminated sign in the kitchen that outlines step by step how to make the coffee – while others will be more complex – i.e., your sales scripts or letter templates.

One thing all of your systems have in common is steps. There is a linear process involved from start to finish. Begin by writing out each of the steps involved in completing the task, and provide as much detail as you can.

Then, review your step-by-step guide with the employee(s) who regularly complete the task and gather their feedback. Once you have incorporated their input, decide what format the system needs to be in: manual, laminated instruction sheet, sign, office memo, etc.

2. Test each system to make sure it clearly and accurately describes the task or duty.

Now that you have created a system, you will need to make sure that it works. More specifically, you need to make sure that it works without your involvement.

Implement the new system for an appropriate period of time – a week or month – then ask for input from staff, suppliers and vendors, and customers. Evaluate if it is informative enough for your staff, seamless enough for your suppliers, and whether or not it meets or exceeds your customer’s needs.

Take that feedback and revise the system accordingly. You will rarely get the system right the first time – so be patient.

Systems will also need to be evaluated and revised on a regular basis to ensure your business processes are kept up to date. Structure an annual or bi-annual review of systems, and stick to it.

3. Train your staff on the new systems, and gather their feedback on how well it works.

It will be nearly impossible for you to develop effective systems without the involvement and input of your employees. These are the people who will be using the systems, and who are completing the tasks on a regular basis without systems. They have a wealth of knowledge to assist you in this process.

Employees can also draft the systems for you to review and finalize. This will make the systemization process a much faster and more efficient one.

It is also important to note that when you introduce new systems into your company, there may be a natural resistance to the change. People – including your employees – are habitual people who can become set in the way they are used to doing things.

Remember that once you have your systems in place, the final step is to delegate tasks to people other than you.

This doesn’t have to mean completely removing your involvement from the process, but it does mean giving your employees enough freedom to complete the task within the structure of the systems you have spent time and considerable thought creating.

Then, allow yourself the freedom of focusing on the tasks that you most enjoy, and most deserve your time – like creating big picture strategies to grow your business and increase your profits.

Now that you have your systems in place, I want to spend an E-Class looking at ways you can reduce operating costs and take charge of spending habits. In the five-step process, it’s the last opportunity you have to influence your bottom line.

Until next time!