Business progress, systems
Ihave personally seen lack of adequate systems in most African start-up businesses as the major cause for their failure to stay in the game. Adequate systems in any business are a strong pillar without which there is no business to talk about. John Jantsch also echoed similar sentiments, “At its core, a fully functioning business is basically a set of systems and processes”
Without written down and religiously adhered to systems, if your business last for a day, know that it has already started regressing. You are now losing out.
“The entrepreneurial perspective views business as a network of seamlessly integrated components, each contributing to some larger pattern that comes together in such a way as to produce a specifically planned result, a systematic way of doing business” (Michael Gerber).
Business is made up of various systems and components that do different interrelated functions producing the desired outcomes. Systems are like body parts, every part small though it might be is there to save a purpose.
Systems need constant updates and servicing the same way the human body needs attention and great care to keep health.
You need to have checks and balances in your business, which can only be made possible with systems.
Systems help us measure that which we have planned for. Any progress in our business should have some form of measurement. Peter Drucker a business author and consultant once said, “You cannot manage what you cannot measure.” So without systems, you're really going nowhere for you don't even know whether you have arrived or not.
Systems have a transformative power. With the right people in your organisation, systems can help you do wonders and achieve your organisational goals.
Michael Dell of Dell Computers spoke into the importance of systems in his statement, “Anything that can be measured can be improved”. With systems and well spelt functions, you can figure out ways of improving your operations and ultimately your results.
I like how Michael Garber synthesised the issue of business systems and functions, “Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant”.
For a business to survive and thrive, 100 percent of all the systems must be functioning and accountable, for example, an airplane is a system of systems. If an airplane takes off and the fuel system fails, there often is a crash.
The same things happen in business. It's not the systems that you know about that are the problem — it's the systems you are not aware of that because you to crash, these are wise words from Robert Kiyosaki.
We have internal controls as some of the systems and procedures that are instituted within organisations. There to detect leakages and waste in your business. In the absence of systems, it's like you're just moving but nothing tells you have arrived or at what speed you are travelling at.
Controls and systems works as your dashboard. You can check the levels of almost all essential components and activities on your car.
Shigeo Shingo, Toyota Industrial Engineer once said, “The most dangerous kind of waste is the waste we do not recognise” Imagine your employees conniving in pilfering your stock, but because you don't have a system that alerts you on that such as stock takes or even the perpetual ones, you will wake up one day broke.
This is a kind of leak that you may not be aware of. The fact that you're not aware doesn't mean it's not happening. Just like in the case of a leaking fuel tank, if your fuel gage is not working, it will be difficult to know in advance that your tank is leaking. You will eventually know as the vehicle cuts off but it will be too late than being informed by the fuel gauge movement.
You can have those manual cash sale books or a computerised system (point of sale), but if you don't use them appropriately, they become useless. They cease to help you achieve your control objectives.
These POS or manual invoices or cash sales need to be balanced off daily. Computing all the cash sales against the cash handed over to you. Don't be too busy for nothing. Get these checked by you or someone. You will be shocked.
There is need to do stock counts, periodically or daily depending on the nature of your business. You need to make sure your numbers are adding up.
Check whether your closing stock figured, actual counted and verified is that same as your theoretical closing stock, that is your opening stock, add (purchases and transfers inwards) less your (transfer out wards, returns to suppliers and sales)
Monitoring these systems keep you alert and aware of what's happening at your work. You can plan ahead and strengthen your systems if need be.
Business systems, operating procedures and process help you manage your business well.
Determined to engage, inspire and transform generations in the areas of entrepreneurship and personal development.
◆ The writer, Dr Kudzanai Vere is an entrepreneur, author of four books, business and personal development, multiple award winning entrepreneurship and business coach. Dr. Vere has coached more than 5000 entrepreneurs globally and continues to impact people in the areas of entrepreneurship, business and personal development. He is the founder & CEO of Kudfort, Transformational Mindset Institute and the Institute of Entrepreneurs Zimbabwe. Contact Dr Kudzanai Vere for transformational entrepreneurship and business coaching and training on kudzanai@kudfort.co.zw or +263 719 592232