Last week, we discussed ten ways effective business systems can directly increase profit. That would be enough to convince any rational business owner to get started. However, there are even more ways well-designed business systems can boost your bottom line.
Systems Provide Hidden Financial Benefits
Below are ten indirect financial benefits you will get from building better business systems and processes.
- Effective business systems enable a company to run without constant hands-on involvement of owners (owners can spend more time growing and improving their business).
- Consistent and reliable systems delight customers and turn them into loyal fans (customers who have a great buying experience keep coming back, and they tell their friends).
- Efficient systems and processes increase sales throughput and the velocity of cash flow (good cash flow helps every company operate better and more profitability).
- Smooth-running business systems create a positive and productive work environment where employees are happier and stay longer (less employee-turnover decreases cost and increases customer satisfaction).
- Measured systems naturally produce a results-driven workforce, which lowers operating costs and boosts performance (high productivity maximizes profit).
- A systematic work environment is an organized work environment—cleaner, safer, more efficient—and one that raises employee morale and attracts quality people (a great place to work is essential to having a culture of excellence).
- Effective business systems and processes give your organization a competitive edge (your product or service is better (fewer mistakes/defects/disappointments), faster (shorter response/delivery time), and cheaper (quality plus speed equals low cost)). You become the “best deal!”
- Exceptional business systems enable you to differentiate yourself in the marketplace (you attract more customers by standing out like a “purple cow in a field of brown cows” – Seth Godin).
- Well-designed systems that achieve intended results are significant business assets and add long-term value to your company (a completely systemized business sells for top-dollar).
- An organization built with effective systems and processes becomes a prototype for replicating or franchising your business in other locations (exponential sales growth is possible).
Good Systems Pay for Themselves
While some system improvements generate large financial returns, most innovations add incrementally to your profit margin. The accumulation of small improvements can have a dramatic effect on overall business results—enough to rescue an ailing company or help a good company become great!
I’ll say it again. Effective business systems pay for themselves many times over. The question is not whether you develop systems, but what new system or process improvement will have the most immediate financial impact on your company.
Learning the Master Skill of system development will take you farther and faster than any other method of building and growing a successful enterprise. There really is no other way!
10 Ways Business Systems “Directly” Increase Profit