May 18th, 2011 David Finkel (Taxloopholes.com Advisor)
Today I wanted to focus on one of the five key building blocks of building a business not a job: Systems!
What Are Systems?
Systems are reliable processes and procedures that empower your business to consistently produce an excellent result for your clients or customers. They are the documented expressions of your business’s best practices that increase your company’s efficiencies and reduce costly mistakes.
Systems include things like the checklists your shipping clerks follow to ensure that all orders are shipped correctly; they include the orientation process you take all new clients through at the start of your working together; they are also the standardized contracts you have in place that you use with all your new hires and vendors. Basically, anything that allows your business to get a consistently great result in an area of your business that is captured in a tangible format, versus just locked in the brain of an individual team member, is a business system.
Take the example of Bonnie, one of our
Consulting Program Clients. Bonnie owns a successful occupational therapy business. She’s smart and a very talented occupational therapist. After we had been working together for several months it became clear that the office manager she had running the administrative and billing side of her business just wasn’t the right fit for her practice. It is never easy to let a team member go but Bonnie knew that the business needed someone else in that key role.
During the process of letting her go, Bonnie realized that much of the knowledge for how to run the back office in her practice wasn’t formally captured in any systems, but rather was tied up in her and her ex-office manager’s head. We encouraged and coached Bonnie how best to let her old office manager go, and to use her new hire as an opportunity to systematize the core functions for that role.
This is exactly what she is hard at work doing right now: writing up the step-by-step procedures for bringing on a new client, including collating all the new client documentation templates and filled out samples so that any team member could walk a new client through the process. She is even redesigning her billing procedures to make sure clients are charged the right amounts at the right times. She’s documenting the therapist scheduling processes and the other key back office functions. In the end she’ll have reduced her business’s reliance on any one specific “Office Manager”, improved the performance from that role through clear systems and training her new hire in the role, and she increased her cash flow by over $50,000 by correcting all the mistakes in her practice’s billing which she painfully learned that her old office manager had done in an inconsistent and haphazard manner.
What About Your Business?
How much of your business know-how is locked away in the brains of your team members?
What if you lose one or more of these team members?
What can you do in the next 90 days to reduce your business’s vulnerability to losing any of these key team members, including you!
How can you centralize the “systems” on individual computers onto your company server? (Or use a web hosted solution to do this like dropbox.com?)
How can you get your key team to HELP YOU build your systems?
What in fact are the most pressing/important systems for you to build first?
I hope these questions really spark you to get into action making your business more stable and secure.