Small business systems and processes aren’t sexy. After all, it’s not what they are, it’s what they can do that matters. Let me ask you, how are you using business systems and processes to accelerate growth and scale your business?
What they are
Systems and processes define how work is done. In small businesses, that might be through practical knowledge that’s not written down. A simple example is cooking. An experienced chef would be able to produce a meal from their personal knowledge. For most of us, we’d need a documented system (recipe) to buy ingredients, prepare, cook and serve food.
Systems and processes work better when designed as a business system. Our guide, Business System: An Essential Guide to Growth, will help you design a robust system for better results.
What they do
Let’s start with why small business systems and processes are valuable. For one thing, if you have systems and processes you can delegate work to others (a cook instead of a chef). When it’s documented, instead of a person disturbing you, they can find answers on their own. When many business owners struggle with work life balance, that’s got to be good. Second is consistency. If you can capture a repeatable way of getting things done, then you get things done right every time. You save time and energy, because you’re not figuring out how to re-invent the wheel. Then there’s responding faster because you know exactly what to do. You can make processes more efficient with automation and save even more time and money. Finally, you increase the value in your business because you capture know-how and it can operate without you.
Business Value
Of course, business is all about value creation. The thing is, many small transactions create the total value to a customer. In a restaurant, cleaning the dishes or buying quality ingredients creates a small amount of value. Cooking great tasting food might be what customers see, yet to achieve that many other things had to happen. There is a chain of value transactions, and when you add all these small value transactions up, you see the total value from the business.
Business systems and processes create value
Business systems and processes produce each of those value transactions. When you hook them together, they work to run the business. For me that makes it more exciting. I see that each business system is creating a little value. If there’s no value, then stop doing it. Together they make the business run. If they run well, it’s like well-oiled machinery.
Core processes
Some processes are core to the business, such as sales. Without these core processes, the business wouldn’t run at all. These are different depending on the type of business. Manufacturers would need to bring in supplies, manufacture the product and then deliver it to the customer. An insurance company would have underwriting and claims. All businesses have sales and marketing and may also have customer service.
Supporting processes
Then there are supporting processes such as Finance. These help the business run effectively. For example, finance sends invoices, receives money and keeps on top of the cash. Theoretically you could deliver to customers without finance, perhaps a small cash-based business, yet it would limit growth. Other supporting processes are technology and human resources. The point is that doing them really well doesn’t make you stand out in the market. They are, however, essential for making the business run smoothly.
Not all processes are created equal
Purists would say you can improve any process. Just because you can, doesn’t mean it makes business sense. There are some business systems and processes that give you competitive advantage. At the other extreme there are ones that are business necessity. The trick is knowing which. That comes from understanding what kind of business you’re in and understanding the customer value proposition. That tells you which business systems and processes make you competitive, and which ones you only need for support.
Finally
Taking a look at your small business systems and processes can give fresh insights for growth. Seeing processes as value creators that are part of a bigger picture of value creation can transform the way a business runs. Investing in systems that increase advantage can help the business grow, scale and exit.
Some leaders struggle to figure out what’s needed; others feel overwhelmed with all the possible choices; and a few feel frustrated that they’re just not moving fast enough. Meet with me for a free 30-minute virtual call and let’s work together to explore the best way forward for you and your business.
If you’d like to explore the ideas in this article further or need help and advice, please contact Rogan at rhounsell@kr5consulting.com – to arrange an informal chat.
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