| Friend,
In the world of business (and especially, consultants) everybody talks about having systems... but few people can actually explain what they are and why you need them.
However, the definition is fairly straightforward.
System:
1. A set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem.
So, "systems" are really just methods or procedures that are done in a routine manner -- "routine" meaning the same way, each and every time.
And, "systems" are also designed to solve problems, or to make work easier and more efficient.
In light of that definition, I think it's obvious why you need them. However, what is obvious is not always clear, so let's examine the concept of "business systems" and the reasons why they are important.
Replacing Yourself
You might recall that in recent email messages, I've mentioned the need to replace yourself in your business. Meaning, you need to hire and train reliable employees who are able to perform the everyday mundane jobs you do just as well as you can.
Initially, in the early to mid-growth stages of a martial art school, this serves the purpose of freeing up the owner so they can work more on strategy (business growth and management) instead of being tied up with mundane tasks.
If your business is financially healthy, you should not be spending your time cleaning toilets, vacuuming floors, and dusting equipment in your Pro Shop. Instead, you should be focused on doing the intellectual work of growing your school.
So, replacing yourself with reliable, well-trained help allows you to do just that.
It's The How That's The Challenge...
That all sounds great, right? However, what many a business owner has found is that hiring and training reliable help is a lot more difficult than it sounds.
In most cases, when employers have difficulty training competent employees, it boils down to three reasons: - They pay too little, and therefore attract sub-par applicants.
- They hire too quickly, and don't take time to select the right applicant.
- They don't have systems in place to train employees efficiently.
The first two challenges are easily corrected -- but the third isn't. Because quite simply, you don't just develop systems overnight. Systems are developed over months and years in your business, and documented carefully so that they might be used to ensure quality control in every aspect of your business.
But once in place, they allow the school owner to train new staff members much more easily. When you have systems in place, replacing yourself becomes so much simpler.
Back To Selling A Business
Do you know the difference between a "personality-driven business" and a "systems-driven business"? The former is a business that only makes money when the owner is present, because he or she must spur every function and action that makes that business tick.
But a systems-driven business functions the same, regardless of whether or not the owner is present. This is because systems drive the business, and every employee knows what the methods, procedures and routines are to perform every duty and activity and to solve common problems.
Now, which business do you think would be more attractive to a buyer? The one that requires the original owner to be present to turn a profit, or the one that operates like clockwork, regardless of who is in charge?
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Tomorrow I'll be back to talk about the next part of future planning, which is training staff. Stay tuned!
Until next time,
Mike Massie MartialArtsBusinessDaily.com
Quick-start Guide to My Books and Resources: - Looking for a list of books and resources I've written? Click here! - Need business coaching to grow your dojo? Click here…
P.S. - "The E-Myth" is still a great book for small business owners to read. In the corporate world and the world of e-business, the book has become passé, falling out of favor in light of new managerial systems and approaches. But, a small business is an entirely different animal than a large corporation. And, it necessarily operates much differently from a large corporation with hundreds or thousands of employees. Read "The E-Myth" if you want to understand how systems work in a small to mid-sized business.
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