A business can be viewed as a collection of inter-related systems. And the creation and management of those systems is the process of building a business.
Why Systems Are Critical to Business Growth
Systems are the only way to build a sustainable business and here is why:
- Systems are predictable
- Systems allow for delegation
- Systems can be measured
- Systems can be improved
- Systems can be scaled
- Systems can be automated
- Systems create a business that you can sell
Let’s look at these concepts in more detail and see how they fit together.
1. Systems are predictable
If you have systems in place you know what’s going on inside your business. Without systems all you have is chaos and you’re reacting on a daily basis to what’s happening in your environment.
This predictability also means that your customers or clients know what they are going to get from your business. You can repeat your product or service delivery again and again and again. This builds trust with your customers and encourages them to keep coming back for more.
2. Systems allow for delegation
With systems, you can train other people to operate them. Delegation allows you, the manager or business owner, to focus on the whole business. This gives you an opportunity to plan for the future, or discover new opportunities etc.
Without delegation you only have so many hours in a day to deliver value.
3. Systems can be measured
When you have a system in place, you now have an opportunity to measure what’s happening. For instance, how long does a task take to complete on average, how many leads did our advertising campaign generate and what did it cost to produce this unit, etc.
4. Systems can be improved
What you can measure, you can improve. How might this be useful? Well there are only a few basic ways to improve your business profits. Reduce your costs. Become more efficient at what you do. Charge more. This is an important way in which systems can help in the running of your business.
5. Systems can be scaled
With business systems, you can scale them to suit the changing needs of your market demand and environment. Which leads us on to point six.
6. Systems can be automated
Once a system has been designed, measured and operated for some time, you may have an opportunity to automate it. And automation is often a way of reducing costs, improving operational efficiency and creating predictability (see point one above).
7. Systems create a business that you can sell
If you are a business owner and you may at some point in the future want to sell your business, it has to be based on systems. Why? Well, if it isn’t based on systems all you are selling is a job. And why would someone want to buy your job?