Arise2Live Podcast
Transcript for Episode #155 ‘Business Systems are Simpler than You Think – A Contractor Example’
Host: Scott Weaver
Date March 22, 2022
Intro: Welcome to Arise2Live Podcast, episode 155. Do business systems seem confusing? They are simpler than you think. In this episode Scott shares four insights about using and creating business systems. Insights that bring clarity and perspective to be a better boss and improve profits.
Scott R. Weaver:
Every business owner has business systems, are yours good? We all know that a good system saves you money and time, but too often short term thinking gets in the way of long-term pay-offs. It is also easy to focus on the effort to create a new system and overlook the ‘Why” and “What’ a business system is supposed to be.
Hello everyone, my name is Scott Weaver, the Arise2Live business coach. Please share and like this episode. This podcast has been growing all year and let’s keep up the momentum to arise2live.
I would like to invite those of you who are at a place in your business growth where you are redefining your vision, your destination on where you want your company to go. I have a short term coaching package that gets you a clear, written out, vision story of your future. This is a real vision for you and your company to strive for, not some corporate vision statement to hang on the wall. Arise2Live is about providing clarity in your company.
For this episode, I’ll come right out and say that the main point is for you to know the why behind a business system and the what of a business system. This understanding can apply to any system and helps you determine which is a good system or a not-so-good one, and doing so, save a lot of time, money, and effort.
There is a saying that those who know the ‘why things are’ are the bosses of people who just know the how. If you are a business owner, you need to understand why and what of a systems is, at a fairly deep level so that you can be a better boss, increase profits, reduce overwhelm, and get the results you want. Otherwise frustration and confusion kicks in.
I realize that when it comes down to business systems, I just know you are all out there wanting to say Yippee! And of course, me, I really want to talk about business systems in the podcast – not! I have to admit that talking about business systems is boring.
So instead, let’s talk about saving money, smoother operations, and increasing profits. Increasing profits is good. You can increase your profits in our business with good systems. That is the ultimate purpose of this episode, to improve your profits by going from short-term thinking to long-term thinking by creating efficient systems that your people will follow.
I will be coming from a different perspective than many other people. Many of my clients don’t have a lot of college education, they are just really good at what they do, whether it’s building something, improving the lives of their customers, or taking a great idea they have to market. Or maybe all three. That’s who they are. Some of the biggest technology titans are college dropouts: Steve Jobs who founded Apple and Bill Gates of Microsoft. So don’t worry if you don’t have a formal education, there are many ways to learn and good business owners are always learning.
My coaching competitive edge is that I have business experience and education–an engineering degree and a master’s degree in business. So when it comes to business systems, I know the theory and the practice. I will be trying to simplify systems down to three insights that business owners need to know… to maximize their systems.
The example we will use today for business systems is a construction contractor building a new house. The process on the surface seems simple: win the bid, get some wood and nails, get the crew out there and start cutting and hammering, then get a check from the owner. Now I know you contractors out there are probably laughing at the simplicity here. There’s permits to get, writing competitive bids that you can actually make money on, how do you verify what is being built matches the blueprints, paying your crew, handling change orders, and a zillion other adventures needed to build a new house.
Most of us can understand the general process of building a house and the need for business systems so that everyone wins: the home owner is happy with the construction of their new home, the crews are paid and proud of the work they did, and you, the business owner, was financially successful without losing more hair. At least that’s the way it’s supposed to work.
Today, you have systems in your business, all business owners have business systems that are running their operations. The systems might be simple ones. Going back to the example of building the new house, the ‘Getting Paid’ system may be as simple as collecting the check from the owner and race off to the bank to deposit it. Or a bad system is getting into your truck and finding an envelope full of cash. Did you forget to pay someone for materials or did someone just paid you?
When the business is just starting out or small, you can get away with just remembering to do things, start-ups have sloppy systems at the beginning and that’s okay because they just left the starting-line. But you cannot grow your business without better systems. You just can’t and that is a fact of life.
This leads into first insights: improving your business systems is key to growth and to smooth operations.
As you grow your company, plan to invest time and money to improve your systems. That’s it. Simple but far too many owners ignore it because it’s boring and a pain.
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Let’s dive in on ‘what is a business system’:
A system is supposed to make life easier by implementing a method or procedure or a process, there are many names for the same thing.
And this brings into the second insight: a business system is a collection of tasks that is intentional and predefined to get to repeatable results you desire and makes life easier.
Okay, that can be a mouthful if it’s your first time. Let’s break it down a bit.
- The Why: Your business system needs to do what you want to do or meet a business need. Or in other words, a good system gets your people to do what you want them to do when you’re on vacation.
The What:
- A system is a collection of many tasks to do…something put together in a package or box. For example, a car needs to shift gears as it goes down the road. An automatic transmission is a packaged unit to shift gears so you don’t have to use a manual stick shift. Now inside a transmission, it gets very complicated, but for the user driving the car just press the on-button and drive away. The transmission in your car is a system of many tasks and likewise in your business you can create systems of many tasks to simplify operating your business.
- Your business systems need to be intentionally created with predefined tasks. Intentional and predefined are the key words. Kinda like, creating systems well thought out and written down so other clueless people can understand how to reach the goal. Most people don’t know how a transmission works, but they still use one. As the owner, you are simplifying complicated tasks for your people.
- The pay-off of the system is to get predictable and repeatable results and quality that saves time and money to increase profits.
Again, a business system is a collection of tasks that is intentional and predefined to get repeatable results you desire and to make life easier.
That’s it. This approach will work for any business process that you want.
For example, let’s take a Customer Inquiry Call, someone is interested in having a new house built. The potential customer calls up your phone number, but you are on the job site. So your helper answers the call.
The “In-Take Sheet” system, there are questions on a sheet of paper that allows your helper to collect the customer’s information and relevant information, such as the job description – size of the house, location, budget, etc. This In-Take Sheet process is a collection of tasks – answer the phone, get customer info, get job description and budget, qualify the customer, and pass that information to you. This process is intentional, predefined, and has repeatable results. It makes life easier. The customer thinks you’re more professional, you don’t have to go back to the customer to keep asking questions, and you can screen out money-losing customers. When you are back in the office, your customer callback becomes quicker, much more efficient, and more likely to determine if this is a bid that you want to follow through on. So a piece of paper with customer questions to ask and to write down the answers, this simple system increases productivity, increases customer satisfaction, and decreases costs.
That’s what a business process is supposed to do.
Remember earlier I mentioned that those who know the ‘why things are’ are the boss of people who just know the how. You are the business owner who needs to know the why of business systems.
I’ll keep repeating this: a business system is a collection of tasks that is intentional and predefined to get the repeatable results you desire and to make life easier,
This definition prevents you from getting lost in the weeds when you build business systems. It also gives you the steps to create one.
First: You identify a collection of tasks that either makes life easier or gets the results you want.
Second: you put some thought effort to be intentional in the purpose and the predefined tasks, so that when executed, you get the same results over and over.
Third: Write it down so others can execute the process when you are not around.
The goal is getting the results you want and to make life easier. Every business system out there follows this definition. Whether it’s a customer intake sheet, onsite material monitoring, or some fancy ISO 9000 process.
The next insight is to only use business systems that are appropriate for the company maturity stage your business is in.
The number and the type of business systems in your company is dependent on the maturity of your company. In the startup phase, things are gonna be a little sloppy and that’s OK. As long as things get done. If you are in a fast growth stage, your systems are gonna be breaking left and right as you replace old systems with new and better systems to keep up. If you are an old hat and have stable revenues for a while, your business systems will be based on efficiency and increasing gross margins. Applying a business system for a different stage than what your company is in, well, that is a recipe for disaster.
This gets into knowing the why of business systems and where your business is at. These things are what a business owner should know.
Another thing I suggest, is to get past the excuses of not developing good systems. Yes, I know that developing systems is a boring thing to do, but if you want to grow and increase profits you need to do this. Get away from the excuses such as: it’s not my skill set, or it takes away from the business, or I have to invest time and money in them. These are subtle excuses that hold you back. I learned that first hand from my own business experiences.
In closing, the main point of this episode is to provide insights on the why and what is behind a business system so you can be a better boss, increase profits, reduce overwhelm, and get the results you want.
The ‘why’ is to get the repeatable results that you desire and to make life easier. The ‘what’ of a system is a collection of tasks that are intentional and predefined.
Recapping the insights of this episode:
- Your company has a business system, whether it’s defined or not.
- Improving your business systems is key to growth and smooth operations.
- A system is a collection of tasks that is intentional and predefined to get the repeatable results you desire and to make life easier.
- Only use business systems appropriate for the company maturity stage your business is in.
Now, I encourage you to get into your company and improve your business systems. Perhaps in the next few days, write out a list of systems that you need to improve on and apply the insights in this episode to them.
Business systems allow you to grow. I want you to grow so you can Arise2Live.
This year has brought a lot of changes. But many business owners struggle to find focused time to update their future business destination and so start to drift off course. Your future business, your future company, and your employees are so important, you must have a solid vision to where you are leading your company. Scott has a vision story coaching package that speeds up the process and provides accountability on your focused time. If you know that you need to update your vision and where you are going, don’t delay any more, please reach out to Scott at Arise2Live;com/vision and get your company on the right path.