Many entrepreneurs operate with their business systems and processes in their heads. They know what they need to do each day and the way they want to get things done. This is natural and a necessity when a business is starting out.
Unfortunately when a business grows and staff need to be hired – or the owner needs to take time away from the business – it’s a real liability not having systems and processes documented in one place.
Read on to learn the top seven reasons to record your company systems and processes, so your business can run more efficiently and effectively even when you’re not there.
Improve Efficiency
One thing you don’t want to do when you sit down to record your systems and processes, is to ignore any gaps where improvements could be made. Recording your current systems and processes is necessary but to miss the opportunity of finding better ways to perform routine tasks, reducing bottlenecks, and eliminating extra steps would be foolish and also potentially damaging for your business.
You may decide that some tasks are too time consuming, and you’d save time and money switching to an automated solution. Reviewing how you do things as you record systems can help create better systems, improving productivity. Develop key performance indicators (KPIs). Don’t fast track this exercise. The more time you spend here, the more benefits you’ll realise in the future.
Don’t think this exercise is a one time job. Systems and processes need to be re-visited and documented regularly as your business grows or adds more technology.
Compliance
Most businesses are required to adhere to certain laws and regulations. Ensuring procedures are well documented will mean you can show you have been following procedures if any legal action is taken against your business. Auditors will also ask for documentation of written policies and procedures. If a company does not maintain up-to-date documentation, the auditors could report the company, which could cost the company time and money.
Staff Training
When it’s time to hire new talent, a systems manual can dramatically reduce the time you spend training. Documenting and standardising your processes can also ensure jobs are consistently performed and to a high standard. This will allow new team members to be trained by any existing employee rather than by the business owner. Sharing your procedure guidelines can help new employees and casual staff quickly get up to speed and give them a reference to check against before asking questions.
Companies always have a particular amount of employee turnover (your company will be no exception), so don’t be left at risk by your employees walking out the door with all the knowledge in their head. Document and document some more.
Safety
If your business falls under certain health and safety regulations keeping and posting documentation is important for employees to understand their rights and obligations to maintain a safe workplace. Failure to comply with the law renders companies and individuals liable to prosecution.
Sell Your Systems
Develop a unique turnkey system that other businesses can implement to save time and cut costs, and you can increase profits by selling your operating manual. Those documented processes are part of your company’s intellectual property, and can be licensed just like your brand name.
Having a Vacation
One of the perks of running your own business is setting your own schedule. But without systems in place, it can be difficult to get away for a vacation, let alone retire. In order to build a business that can run without you, you need to be able to delegate the tasks and processes to someone else, with confidence they’ll be performed correctly and consistently.
Sell Your Business
When it comes time to sell your business, you’ll get top dollar if you can provide a buyer with an operating manual. A potential buyer wants to know the business will continue to run smoothly without you throughout the transition period, and that institutional memory will be retained when there’s staff turnover. The greater ease with which someone can step in and operate the business, the greater the value and the higher your compensation when you’re ready to sell.
As we’ve seen, there are a number of excellent reasons to review your systems and processes and record them, even if you’re just starting out. My recommendation is to plan to update them yearly, just like your business plan, to discover best practices and ensure it maintains its usefulness to you and your staff.
Ready to begin documenting your systems and processes? Contact us and we will get you started.
