Many entrepreneurs operate with their business processes and systems in their heads. They know what they need to do each day and the way they want to get things done.
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 processes and systems documented in one place.
Read on to learn the top five reasons to record your company processes and systems, so your business can run more efficiently and effectively even when you’re not there.
1. Improve efficiency
When you sit down to record your processes and systems, you may discover gaps where improvements could be made. You might find better ways to perform routine tasks, reducing bottlenecks, and eliminating extra steps. 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.
2. Support staff training
When it’s time to hire new talent, a systems manual can dramatically reduce the time you spend training. Documenting your processes can also ensure jobs are consistently performed to a high standard. Sharing your procedure guidelines can help new employees and casual staff quickly get up to speed on expectations, and give them a reference to check before asking questions.
3. 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.
4. Get away
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 fora 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. Another excellent reason to make sure your systems are recorded, and your manual is updated regularly.
5. 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 record them, even if you’re just starting out. You might plan to update it yearly, just like your business plan, to discover best practices and ensure it maintains its usefulness to you and your staff.
Contact the Maddock’s Accounting & Advisory team here to find out how we can help.