Sally’s cupcakes are amazing! Everybody tells her so. She spent hours as a child in her grandmother’s kitchen. Sally’s love of baking as a little girl has turned into her passion as an adult. Sally started out baking for friends who were getting married or having babies. They encouraged her to turn her passion into a business so she started selling at her local market. She had people coming from far and wide just to buy her cupcakes. It was time for Sally to consider turning her hobby business into a ‘real’ business. And that’s when she discovered there’s a lot more to running a business than a delicious cupcake!
It really doesn’t matter how passionate you are about your business, or how good your product or service is. If you don’t have the back-end business support, you’ll end up losing money, losing customers, and ultimately it could lead to you losing your business. But it’s never too late to start thinking about good systems for your business. It can be quite a process though so let’s chunk it down and start thinking about the five key areas of your business that you should consider implementing systems into.
What lack of systems means for you
Of course businesses can run without systems. But the lack of good systems can mean that your business can’t grow to its full potential, you’re losing customers as quickly as you’re replacing them (hole in the bucket scenario), and you’re losing money. And what happens when you go on holidays or need to be away from your business? How will your business cope without you? When you start to analyse your business, you’ll start to discover gaps where improvements could be made. You might find better ways to perform routine tasks, reducing bottlenecks, and eliminating extra steps. There may be holes in your business that good systems can plug. Here’s how your business can look when you have good systems:
- You don’t spent most of the day putting out fires.
- The business manages itself better because there’s a natural flow.
- There’s consistency of output.
- There’s less customer churn and more customer loyalty.
- The business is more profitable.
- A systematised business is a sellable business.
Start thinking about systems
The process starts with the lot of questions such as:
- Why did you go into business? What excites you about your business? What does success look like for you?
- What opportunities should you have taken and didn’t? Why didn’t you?
- What are your biggest business challenges? Why are they a challenge and what are the implications?
- Do you have documented policies and procedures? How often are they reviewed and updated?
- Who’s your target market? Where do they come from? What makes you different to your competitors?
- What problem are you solving or need are you fulfilling for your customers?
- Do you have a marketing plan or a marketing budget?
- What’s the process when an enquiry comes in? How is information captured?
- Is there a format for selling to a customer? Why do you do it this way?
- What’s your general work flow? Why do you do it this way?
- Do you use any project management / workflow software? Who‘s responsible for its implementation and use?
- How do you monitor stock?
- Do you know which items are earning you money?
- How do you know when you’re ready to hire staff?
- What’s your recruitment process? What’s your on-boarding process?
- How do you capture employee information? How do you keep track of employee times?
- Do you have specific people performing specific roles in the business? Is there any overlap of skills?
- What’s your pricing model? Why do you do it this way? How often do you review your pricing?
- What are your payment terms? What payment methods do you offer?
- If your cash flow was sorted, what would that look like? What would it mean for your business?
- Do you have a budget? How often is it reviewed?
- Do you use accounting software? Who’s responsible for its implementation and use?
Sally went into business because she loves to bake. And she loves the look of joy her customers have when they receive a box of fresh cupcakes. Sally knows the customers she wants to work with, but she doesn’t have a plan of how to directly attract them. She has a great reputation which means new customers contact her every week, but she’s spending nearly every waking minute baking, just trying to keep up with demand. She’s constantly thinking about her ever expanding operation, but doesn’t have any time to do anything about it. Nor does she know how! Not to mention the pile of other jobs that haven’t been attended to because there’s just not enough hours in the day.
Sally knows she needs to relocate from her small kitchen to a commercial facility. She knows she needs to hire staff to keep up with demand. She knows she needs to have a better handle on her stock and make better buying decisions. She knows she needs to have documented processes so her staff can take over production while she’s working on the business.
Asking questions like these will get you thinking about your business in ways you never have before. Then you’ll see the areas of your business that can do with some improvement through systematisation and this is where the real magic happens! But don’t worry, you don’t need to systematise your business in a day. Just start with a plan!
Change can be challenging for business, but without change it’s difficult to reach your full potential. And you may think you’ve gotten by well enough so far, so why do you need to make changes now? The term ‘because we’ve always done it that way’, isn’t a good enough reason not to implement systems that could revolutionise your business!
Whether you sell cupcakes, build houses, or provide professional services, good business systems just make good business sense.