One thing I’ve noticed time and again with many business owners is that they’re trying to implement the wrong systems at the wrong time. Even setting up the right systems at the wrong time can cost your business time, money, and headaches!
There’s 5 core stages of business that people move through, and if you spend your resources implementing the wrong systems of the wrong time, or even the right systems at the wrong time, it could be detrimental for scaling your business.
Basically, although you think you may be doing the right thing, you won’t actually be getting the profit or growth you should be within your business and industry.
Here’s what you should be systemising in your business, and when.
What can you systemise in a business?
What you should be systemising in your business really depends on which stage you’re at.
Stage 1: The ‘Dream Up’ Stage
The Dream Up stage is when you're essentially doing $0 in revenue. At this stage, it’s really around validating your idea. You may think it’s a great idea, but how will you know people are actually willing to buy the idea?
I’ve seen a lot of terrible business owners that are running that are running multimillion dollar businesses very profitably without a sense of running business at all… because they have a really good offer, in a really good niche.
Likewise, I've seen a lot of amazing business owners who are very smart but doing poorly, not making money, and struggling to grow their business. Why? Because they've got a very poor offer in a crowded market place.
So in the Dream Up stage, it’s really around validating your idea. The things you want to focus on this point in time is around your distribution channels. How are you going to get this product or service out to the masses?
To work this out, you need to start to look at the marketing and sales component of the business. What will you need to put in place? What resources do you have that will help you establish the foundations?
Stage 2: The Start-Up Stage
Your business is in Start-Up stage when it’s doing up to half a million dollars in annual revenue. This phase is often the riskiest phase - in fact, less than 4% of business owners make it past their first five years in business.
That's because they start out for the first time with access to all these different resources and knowledge, and all these things to take on board… it’s easy to lose focus on what’s most important for successfully navigating your way past the 500k mark.
If you're in the start-up phase (between 0 and 500k a year), the core systems and processes you should be focusing on his around marketing and sales. Spend 80% of your time on how you’re going to generate new leads and make new sales for your business.
Stage 3: The Ramp-Up Stage
At this stage you’re doing around 500-750k per year. This stage is about stabilising the fulfillment and cash-flow processes within your business.
Now that you’ve got your marketing and sales systems in place, you need to start focusing on how to make sure you can fulfil at scale. It's time to hire staff (if you haven't already) to deliver your product or service, and even run the marketing and sales for you.
In terms of cash-flow processes, you can usually get away with pretty poor cash collection processes in place up to the 500k mark (depending on the business). Yet if you haven't got a process in place for making sure that you're getting paid on time, and that you're paying your bills on time, it can start to become an absolute nightmare.
Not only will you have trouble paying suppliers, but obviously paying staff too, paying for products, and bankrolling the business growth. Make sure these are in place before you try to scale further.
Stage 4: The Scale-Up Stage
This is where things start to get exciting. You’re doing at least 750k a year. You’ve got a team. Things are chugging along nicely. But there’s still a ways to go...
Now it’s time to focus on is people and KPIs. At the 750k mark, you've no doubt got people working for you, and culture starts become a thing. If you've done things right, you're starting to remove yourself out of the sales and marketing, and you’re starting to remove yourself out of the fulfilment aspect of your business too.
It’s now really about installing your DNA.
What’s your vision, mission and values? What’s the culture that you want to create within your organisation, so if you're not there the business still thrives?
As for KPIs… imagine you're sitting on a beach somewhere in Hawaii. How can you look at your phone, and just by reading a few numbers, know that your business is on track? That it’s growing and healthy?
Stage 5: The Leader-Up Stage
You’re turning over $1 million dollars (or more) a year. Congratulations! You’re outgrown 96% of businesses out there, so well done. But the journey isn't over yet.
So this final stage is around optimising what you've currently got. Yet it can be a significantly challenging time, because any lessons that you haven't learned may come back to bite you in the butt.
If you’re doing over $1 million a year, and you’re noticing that you haven't been able to get past that glass ceiling, it's because there's been some lessons that haven't been learned in the prior stages to here.
You need to go back and simplify the business, remove the complexity and get the structure set up around:
- Your marketing and sales systems
- Your fulfilment systems
- Your cash collection processes
- Building culture
- Hiring and retaining A-player staff
Until you get these processes working optimally, you’re going to struggle to get past the $1 million mark.
How to start creating these systems
Systems are a step-by-step approach to achieving a measurable and repeatable outcome. They’re essentially a map you can give to any new member of the business, and they will know:
- How to perform the tasks within their role
- What is expected of them at a high level
- How their role and tasks fit into the business as a whole
- What success looks like for all tasks and functions of their role
- What resources are available to them
Ideally your systems will be so water-tight that your staff feel totally able to perform their role to a high standard, without the need for lots of questions or hand-holding.
At The Game Changers, we have a process for creating systems. It’s like a ‘master system’ that all staff members use to map out the systems and processes within their role. Using a master system means that each employee is empowered to create their own OPS manuals for their roles, protecting the IP of your business should they leave.
Is it time to work on your business systems?
If you’re a business owner stuck at your current level of income, I invite you to book a 15 minute call with one of our Scaling Experts.
We’ll have a quick chat about your business, and if we can help you, we’ll look at booking in a longer discussion to dive deeper into your business and identify where you want to be, and how to get you there.