Many studies have shown that businesses with weak systems seldom achieve efficiencies above 66%. While 100% efficiency is impossible to achieve, a good system can easily increase efficiency by up to 30%. The financial cost of not having a good business system is obvious. What is not so obvious is the impact of poor systems on your customers. The total profit lost can easily be double this amount when you account for the loss of sales.
It is not enough to have Business Systems (such as procedures, templates and checklists), because on their own, there is no guarantee that they will be used in the right way or at all if you are not there.
The system for your Business System is the Business Management System.
How these work is illustrated in the article How many Gauges Do You Watch in the Cockpit of Your Business?
A Business Management System will drive your business to achieve your goals and allows you to Run Your Business by Reports. This is the obstacle to growth for most small businesses.
What does a Business Management System Look Like?
The starting point for any Business Management System is the Business Mission and Goals, typically described in a Business Plan. This plan would also describe the Key Business Areas and Key Result Areas of the business.
Each Key Business Area will have a library of Business Systems, consisting of Procedures, Templates, Checklists and Scripts which describe the way each of the Tasks for that business area are to be undertaken. Your system will be based around policies, planning and procedures in every part of your business that you and your staff will apply every day.
Some of the common areas where systems are implemented are Financial, Administration, Operations, People, Marketing and Risk Management. A Business System does not have to be complex-good ones aren’t! They are also essential if you want to grow your business. Many businesses fail as they expand, or change their focus, because their systems are inadequate, and quality declines as they try to service more customers.
For each Business System, there should be a benchmark which describes the Performance Standard for this task. For example, How many sales per month or the Acceptable Error Rate for data entry.
While the systems at this stage describe how things should be done, they don’t describe who should do it! The Business Management System should also describe the Roles in the business. This is different to the people actually employed, as some Roles may be vacant, or people may have more than one role, with the expectation that others will be brought in to assist as the business grows. These Roles are associated with the Tasks from which a Position Description can be created.
Finally, people can be allocated to Roles, and complete Task lists are provided to each person, along with a description of how the Task is to be undertaken, and the standard to which the task is to be performed.
With such a business system, each staff member can be appraised with the Performance Measurement function of the Business Management System. That is a person’s results can be objectively compared with the Performance Standard as provided for each task that is assigned to the individual.
The driver of your Business Management System, without which, it is just a bunch of manuals gathering dust, is the Reporting System, which is a crucial, but often neglected part of a Procedure or Operating Manual. The Reporting System measures Business Performance against plan and compliance with the Business Systems.
There can be multiple formats for the Business Management System, also often referred to as a Procedures Manual or an Operating Manual. Its simplest form is in a folder, but it can also be presented online in a browser window. The advantage of an Online Operations Manual, is your staff always has access to the latest version of the Operations Manual from the nearest internet connection. This is particularly useful if you have remote or travelling staff. An online manual can also contain hyperlinks to connect different systems with a click. It can also be searchable, and staff can just print the parts they need. The manual can also be designed so that the staff can only access those parts of the Procedures Manual that you want them to see, so for example, your temp receptionist cannot see your secret recipes.
How to Have Your Own Business Management System
and Operating Manual
Empower Business Solutions provides a consultancy service to assist small businesses develop their own Business Management Systems and Operating Procedures Manual. We work onsite with you and your team to build the Business Systems Manual for you. As part of this service we can:
- Develop an Operating Procedures Manual either in an offline or online format
- Provide Operating Procedures Manuals to reflect the duties of each staff member
- Provide an Operating Procedures Manual maintenance service, to keep your manuals updated throughout the year.
- Provide Performance Reporting Service against your Operating Business Systems Standards
This service is ideally suited for businesses with between 6-20 staff (or contractors).
How does this compare with off-the-shelf business systems template? While these templates can be very low cost, and may be of use to a business just starting-up, they are of little use to a business that has been operating for a number of years with an established, preferred way of dealing with most things, even if it is not well documented. The templates are necessarily generic, and only become of value if you actually change the way you do business to follow the template. The existing systems in most established businesses are more sophisticated and superior to those in templates, which are then unlikely to be adopted.
Empower Business Solutions creates operations procedures manuals based on your business organisation, not based on some generic, fictitious company.
To find out more about this service or to view a sample business system, please Click Here.
When you have a Business Management System Operations Procedures Manual, you will:
- Increase Your Productivity
- Reduce Your Costs
- Reduce Staff Turnover
- Increase Your Profits and Value of Your Business
- Reduce Your Business’ Dependence on You
- Create a Saleable Asset
Ultimately, you will Have a Business the Runs Without You.
A Business Management System will guide companies to manage and monitor their activity that will produce a predictable dividend return for the money, time and effort invested. It will give you control of your business even if you are not there.
If you are unsure if this program is right for you, request a Complimentary Business Evaluation and find out how to: