How to Build a Successful Business – 2: SystemsLast Updated: May 1, 2020
How can you have a solid, steady and successful business without Systems? The short answer is, you can’t! Entrepreneur Colm O’Brien explores the second of the three ‘legs’ on which all strong businesses must be built.
LAST time, I began this three-part exploration of how to build a successful business with an analogy—likening a solid business to a three-legged stool. Three legs guarantees that a stool will always sit solidly on the floor.
In my experience (with Carambola, €7m+ annual turnover, 100+ employees) the most effective, successful and potentially sustainable businesses must have three legs. Any fewer and just cannot stand. Any more, and they run the risk of ‘wobbling’, for reasons outside your control.
So, just to recap quickly, the three ‘legs’ upon which the steady stool of business rests are:
That’s it. The most effective and steadiest business model will be strong across all three of these ‘legs’. In my previous post, I firstly explored the importance of Brand reputation as one of the ‘legs’ needed for a successful and potentially sustainable business. This time, I’m looking at Systems.
If you’re reading this for the first time, take a quick look at the first part of this series, and then check out my short ‘Coffee with Colm’ video below, before reading on…
How to Build a Successful Business – Why Systems?
In relation to the question of how to build a successful business, what exactly do I meant by Systems? Well, let’s look at the question another way.
Have you ever had to clean up after dinner? Most of us have. For the purposes of this particular scenario, imagine taking your plate, knife, fork and drinking glass from the table. You wash the knife, dry it, and put it away; you wash your fork, dry it, and put it away; you wash your glass, dry it, and put it away; you wash your plate, dry it, and put it away.
Then, you return to the table and take the next person’s setting, plate, knife, fork, glass and wash them individually, drying and putting away individually as you go. Then you repeat this process for each dinner guests’ setting.
Does this sound very effective? Very efficient? No. But it is a system. A system is simply a way of doing things. Some systems are more efficient than others. When planning how to build a successful business, the trick is to have a system and work constantly on the efficiency of that system.
Among the definitions for the noun ‘system’ listed on Dictionary.com are the following:
- any formulated, regular, or special method or plan of procedure: a system of marking, numbering, or measuring; a winning system at bridge.
- due method or orderly manner of arrangement or procedure: There is no system in his work.
Your business needs systems for everything. A system is simply a way of doing things. Some are more efficient than others. To consider this in the simplest sense, your business will require a number of systems for:
- Making sales
- Producing the product (or supplying the service)
- Getting paid
And the only piece that you get paid for is the sale. That’s it! Everything else is excess; perhaps necessary, but excess all the same.
Make a sale, throw it over your shoulder, the production system catches it and produces it, the delivery system delivers it, the customer care system ensures customer satisfaction. Repeat.
I always say that in Carambola if you are not engaged to make a sale, make a sandwich, pack a lunch bag, drive a van or act as Customer Care Representative, you are part of the overhead, and that includes me as MD.
Back when Carambola started in 2003, I was all of those people and performing all of those roles. I was making the sales, I was making the sandwiches, packing the lunches, driving the van, and making sure the client was happy. Once all of that was done, I had to do everything else; including placing orders, receiving goods, raising invoices, collecting cheques, banking money, paying bills… everything.
Gradually, as the business grew, I appointed people to take over these roles, initially part-time, and most of the early employees were performing in multiple roles, until the business was strong enough for them to begin to specialise. I hope that this post makes it clear why you need strong systems for your business to grow.
Next time, I’ll talk about the magic third leg on our three-legged stool – People.
If you missed the first of this three-part series, Branding, check it out here. And if you are interested in how these principles are derived from and relate to the world of startup business, there is more extensive reading in my book, Feeding Johnny: How to Build a Business Despite the Roadblocks.