Systems Are A Small Business Owner’s Friend
By Jennifer Craig | October 29, 2012
Developing Systems of Operations is Just Another Way of Saving a Business Owner’s Life and Sanity
There are three things to keep in mind when starting a business:
- Systems are your friends;
- Systems make your life easier; and
- Systems help keep the business operational.
However, there is a caveat – the system needs to work. In this article, systems refer to organized structured steps of operation to make life easier. In essence, these are methods for achieving an outcome or result in a convenient (repeatable) way.
For example, in a retail business, it is imperative that there is a system for tracking inventory. At the end of each month, the owner should be able to conduct an inventory count by adding the inventory purchased, to the inventory on hand at the beginning of the month, subtracting the inventory sold during the month, and see everything balances. If it does not, then it is possible that inventory is leaving the business location without payment, which is another issue entirely.
The question of importance for the current issue is, “What kind of inventory system will provide the needed information without breaking the bank or wasting valuable time?” Most small businesses are not software developers (which is costly when hiring one) so it makes sense to purchase a simple, reliable product. That system should also track inventory so when it is low or if an item is gone, it will highlight that fact so items be reordered.
When selecting a system, ask these questions:
- How is it going to make the process better, easier, or faster?
- What kinds of measurements are in place to ensure it is going to do its job?
- Is the system too complicated to make it effective?
- Have there been complaints or good testimonials?
With that said, make a list of what systems are needed. Then decide who will be involved in creating and evaluating it. If purchasing a system to track inventory, handle invoices or orders, delivery/shipping, information, security, etc., be sure to research it and get referrals whenever possible. Too many times, businesses buy a system to find out it will not work for them and they are forced to buy a second one. Avoid that expense if possible.
A business owner who tries to juggle everything without a system is asking for problems. In order for a business to operate effectively (meaning decreasing costs and time but increasing profits and results) and productively, good systems are mandatory. Besides saving a business owner’s life (lowering stress), effective systems save the owner’s sanity as well.
Beware of getting something that requires time and/or money that are not available. Accounting systems can be wonderful, but even the simplest requires training – understanding chart of accounts, double entries, payroll and more. Sometimes, for really small businesses, it is easier to outsource some functions like payroll or taxes. Beware not to turnover files to another person or business. Retain all original paperwork (like canceled checks or employee files). This will prevent losing valuable information should the relationship end. Don’t turn over check signing responsibilities.
After researching, check references, get demonstrations and trying the system before buying, management is ready to make a purchase. Creating a system, like buying, requires input from all who will be using it. It can be as simple as opening the mail or answering phones. Each step should be outlined and priorities set. The development should be something easy to use and beneficial.
Once a system has been created or purchased, it has to be implemented. Time is a huge issue for most small businesses but a manual can explain each system. They can be easy step by step instructions on a page; each page going into the manual. Employees need to have those manuals close by to refer to until they are comfortable in operating without them.
It is true that systems are a small business’s friend. If you create good systems that promote good habits and good business practices from the outset, then you won’t have to go back and try to create or replace those systems later. Of course, as the business grows, systems might change and that is good. A system is only as beneficial as it is effective; ironically, in the end, those systems will be the owner’s “support system.”
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