This post, brought to us by the Young Entrepreneur Council, was written by Nick Reese, a founding partner of Microbrand Media, which specializes in digital strategy and affiliate marketing.
A common motivation for entrepreneurship is the craving for freedom that is supposed to come with being your own boss. People envision setting their own hours, delegating work to a competent staff, and smiling benignly at the books while the money flows in without a hitch.
Unfortunately, even the most talented people with the most marketable ideas often wind up being slaves to their new businesses instead. If you’re working for the business instead of the business working for you, you desperately need a system.
What’s a system, and why do I need one?
A system breaks down your businesses processes and sets verifiable checkpoints with expected outcomes for each task. A comprehensive system is much more than a simple how-to document; it’s more like an organic collaboration of ideas and validations, constantly updated by every member of the team to find the minimal number of steps necessary to maximize return on investment.
To put the value of systems in perspective, imagine you’re opening a brand-new cupcake shop. You are known for making the best cupcakes in town, but you’re only one person. To grow your business, you’re going to need more people to help you run it. These people may not have your talent for making cupcakes, so you’ll have to build a system to help your employees run the business for you. Without smart systems in place, your business won’t grow to the levels you want.
Follow these steps to create bulletproof business systems that boost profits while freeing up time and expenses:
- Let go of having to do absolutely everything. For most startup entrepreneurs, the business is their baby and they want to be to be hands-on every step of the way, but this is a common growth limiter. Making your business successful means letting go of control over every detail and making employees accountable for doing their jobs.
- Adopt automated processes whenever possible. If you can implement simple systems for your most essential business processes (cleaning, ordering, etc), you can step away knowing that most of these systems will go according to plan. You can confidently delegate repetitive tasks to employees, freeing yourself to work on the areas of the business that generate additional cash flow. Any processes that you can’t fully automate should be batched, including email campaigns, social media campaigns, monthly ordering, and more.
- Draft thorough step-by-step manuals. A good process will include training materials, which may be how-to procedures, templates, worksheets, sample orders, bills, or other documents, spreadsheets, a workflow chart or software, an FAQ page, and any other information needed to perform the task at hand. Checklists are especially handy to ensure consistency and quality. Each task can be broken into steps and checked off when complete. This may sound intimidating, but a simple shared spreadsheet online will do the job — and allow you to delegate tasks going forward.
- Hire employees you can trust. For complex situations, implement an open-ended decision process that I like to call line-of-sight decision making. Line-of-sight decision making is where you, as a business owner, realize that no system will cover every possible scenario, so you trust your team to solve most problems they will encounter. If you run out of flour at the cupcake shop, let your team decide the best medium for solving the problem. In real life, most problems aren’t as simple as this example, but it illustrates why hiring and effectively managing A-list players is key — because you shouldn’t have to tell people where to get flour.
- Create a two-way training process. To ensure that your employees do things your way and think the way you do, it’s important that they are well trained. Make sure they understand every aspect of their job, including why things are done. Also, empower members of the team to propose changes, reject inefficiencies, reduce redundancies, and build and refine successful processes.
- Track each system’s efficiency. Most successful systems should also have a simple feedback loop built in. This feedback loop will make it easy to see when things are going as planned and when they aren’t. Reviewing feedback can be as simple as a weekly or monthly check-ins with team members or as complex as financial modeling based on performance data. As the business grows, these feedback loops will allow the system to become more and more focused.
- Leave room for error, and expect it. In a business, sometimes — well, often — things don’t go according to plan, so your systems need to be flexible enough to account for that. These unexpected events are a great time for you to trust in yourself and your team to figure things out. From there, notice what went wrong and fix it in your system so you don’t make the same mistakes again.
The best part is that you, the business owner, can concentrate on what you do best — whatever it is that made your dream a reality in the first place. Surround yourself with rock stars, give them the tools necessary to do their jobs, and get out of the way. Ideally, everyone in the chain will know what to do – and will do it.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
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