The Power of Business Systems

Use Systems to Drive Growth, Valuation, and Scalability

Small and midsize businesses (SMBs) often stall on their growth journey when they become overwhelmed with too many disparate client types, one-off solution promises, and meandering or chaotic internal processes.

These companies lose precious time and growth potential because they’re too busy managing complexity. And often, too much of the business know-how resides only in the heads of the current workers – slowing scalability. Sound familiar? Hey, I’ve been part of those early and growth-stage situations too!

For CEOs, applying a structured approach to business functions is pivotal for enhancing efficiency, streamlining operations, and driving long-term success. In this blog post, I explore the importance of and delve deeper into these critical business systems for SMBs. Read on so you can start getting ready to scale.

Benefits of Business Systems for SMBs

Small and midsize enterprises often operate with limited resources and a tight-knit team. Maximizing the capability and impact of each persona and role in the company is crucial.

In such scenarios, having well-defined business systems becomes paramount. Let’s explore some key benefits that business systems offer:

• Enhanced Efficiency: Business systems provide structure and clarity to daily operations, ensuring tasks are executed consistently and effectively. By establishing clear processes, SMBs can optimize workflows, reduce errors, and maximize productivity.
• Streamlined Operations: Implementing systems helps identify bottlenecks and inefficiencies within a business. By analyzing and refining these processes, SMBs can streamline operations, reduce costs, and improve overall performance.

• Scalability: Business systems pave the way for growth and scalability. As a business expands, scalable systems enable smooth operations and facilitate onboarding new employees. This ensures that growth doesn’t lead to chaos but instead creates opportunities for increased revenue and market presence.
• Increased Valuation: Well-developed business systems contribute significantly to a company’s valuation. Potential investors and buyers look for organizations with efficient systems that can sustain growth, generate consistent revenue, and operate independently of specific individuals.

The Four Main Types of Business Systems

1. Marketing System: A robust marketing system focuses on generating a consistent flow of leads into the business. It encompasses various strategies, such as digital marketing, content creation, social media engagement, and advertising.
   • By identifying target audiences, developing compelling messaging, and implementing marketing campaigns, SMBs can attract potential customers and build brand awareness.
   • I recommend systemizing your marketing by leveraging a marketing CRM platform such as HubSpot to implement your activities and capture, segment, and nurture leads for future sales conversion.
2. Sales System: A sales system involves lead nurturing, follow-up, and conversion. It outlines the step-by-step process to guide potential customers through the sales funnel, from initial contact to final purchase.
   • The sales system also leverages your CRM platform and built-in tracking, scheduling, and communication automation tools.
   • By employing effective sales techniques, providing personalized support, and addressing customer concerns, SMBs can increase conversions and drive revenue growth.
   • The focus should be on helping solve the customer’s problem. There must be documented sales training, steps, scripts, follow-up cadence, etc.

3. Operations System (the core thing you do for your customers): The operations system revolves around planning, making, storing, and delivering your actual product or service solution to customers. It includes R&D, production, order processing, delivery logistics, and customer support.
   • A well-designed operations system ensures that products or services are manufactured and delivered efficiently, on time, and with a high level of quality.
   • Some fundamental tenets of a great operations system include continuous improvement, respect for people, standardization, and long-term thinking.
4. Administration System: The administration system encompasses the essential administrative activities that support all other business functions. It includes accounting, financial management, human resources, legal compliance, and other back-office operations.
   • An effective administration system ensures smooth internal processes, compliance with regulations, and proper resource allocation, enabling the business to focus on core activities and growth-oriented initiatives.
   • Applying the right systematic approach to your financial management has the power to significantly improve your bottom line.

Conclusion

Implementing business systems is a crucial step for small and medium-sized businesses seeking sustainable growth, increased valuation, and scalability.

By establishing marketing, sales, operations, and administration systems, SMBs can optimize efficiency and deliver exceptional customer value. These systems empower businesses to streamline processes, adapt to changing market dynamics, and focus on strategic initiatives.

One more thing

This article touts the benefits of creating scale by planning, documenting, streamlining, and automating to achieve effective systems. However, don’t allow your company to get swallowed by process and bureaucracy.

Your customers and employees remain your top priority for achieving success. They still require a human touch of honesty, authenticity, warmth, surprise and delight. Allocate some of your newfound bandwidth toward making your company memorable!

Need help getting started on business systems? Let’s chat – contact me at don@afdonex.com.

Suggested Reading

• Gap Selling – by Keenan
• Stop Hustling: Start Scaling – by Scott J. Sambucci
• The Sales Acceleration Formula – by Mark Roberge
• The Toyota Way – by Jeffrey K. Liker
• The Lean Startup – by Eric Ries
• E-Myth Revisited – by Michael Gerber
• The Pumpkin Plan – by Mike Michalowicz
• The One Page Marketing Plan – Allan Dib
• Getting Real – by 37 Signals
• High Output Management – by Andrew S. Grove
• Built to Sell – by John Warrillow