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How to develop business systems strategy

Running a million-dollar business is different from running a ten thousand-dollar one. I believe it is the wish of every entrepreneur to see their business grow as fast as possible. With growth comes a number of challenges, including keeping the various functions of a company operating efficiently together without the owner having to oversee everything.

If you look at a properly run large firm, you will notice that it has many departments with people performing different and seemingly unrelated activities, yet all the parts are interconnected and result in the final finished product or service.

Visionary entrepreneurs know in their mind how big they want their businesses to grow and they develop an appropriate business systems strategy.
A good business system summarises all the essential functions and activities of a business into written documents, called business systems manuals or standard operating procedures. Having such documents has many benefits, the main ones being as follows:

Ensuring consistency of results of work through creating step-by-step processes

Ensuring consistency of quality of products and services

Allocation of responsibilities, ensuring everyone knows what to do and how to do it, simplifying supervision and performance management

Reduction of errors and wastages that may result from forgetting necessary steps

Increased profit through improved productivity and efficiency

Written business systems are a useful training tool for new staff. They help to meet regulatory requirements and quality standards.

Areas where you need to develop systems

Documented systems are required in all the important functions or departments in a company. Depending on the type of your business, these will include finance, administration, sales, marketing, production, procurement and human resources.

How to develop your business systems strategy

It is important to start by determining what your business systems will look like. You should decide how you will document your procedures and what tools and resources you will need. There are many tools available that you can use in developing your business systems, including checklists, templates and flow charts.

Whatever you choose, keep in mind that your systems should be as simple as possible (think of following a recipe), yet detailed enough that someone who has never seen them before can easily follow your system and still produce the desired results.
To ensure that anyone can pick up your documented business system and figure out what to do, here are three steps to get you going:

Step One: Start at the end

Know your goal first and then define the steps necessary to get there. For example, when setting up a financial system, your end product will be a complete and accurate set of financial statements.

You then define the processes that have to take place in order to get the statements, such as how and when transactions are going to be recorded, by whom, how to ensure accuracy, how to prevent errors and so on.

You may need to create templates or forms to be completed when certain transactions are being done.
Forms will ensure that information is recorded uniformly and that transactions are properly originated and authorised.

Step Two: Test what you created
To test your system’s effectiveness and efficiency, you may ask someone not involved in that function to read through and see if they can follow the processes.

If people find it difficult to understand the system it will be hard to implement it. Input and feedback from your staff during the development process will be useful in creating a system that is simple, efficient and user-friendly.

Step Three: Train others to use it and apportion responsibilities
Your staff will need to be trained in using the system. Ensure that all those involved in the function understand the system. Managers and supervisors need to ensure the system is followed and there must be ways of checking and confirming that.
You will find more information at my website http://smebusinesslink.com.

Phillip Chichoni is a business planning and financial management consultant who works with entrepreneurs and growing businesses. You may contact him on chichonip@smebusinesslink.com

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