Business Systems and Processes^.

The Systems Thinker Blog

Sales Equivalency—The Surprising Power of Cutting Costs!

2 Mar 2011

Every dollar you save through cost reduction—one of the primary purposes of your business systems—is far more valuable than the dollars that come from sales. In tough times, cost-cutting can preserve your bottom-line profit when your top-line sales are struggling. Let me explain.

A sales dollar is reduced by commissions and other sales costs, the actual expense of the product or service you are selling, and even administrative or overhead costs. In fact, a net profit is all that remains. For example, if you sell a $100 product, and you have an 8% net profit margin, that $100 sale will eventually put eight dollars in your pocket.

On the other hand, if you save $100, THE ENTIRE AMOUNT GOES STRAIGHT TO YOUR BOTTOM LINE. YOU GET TO KEEP IT ALL!

Cut Costs

Sales Equivalency

Another way to look at this is to calculate the “sales equivalency” of your dollars saved. If your company has an 8% net profit, and you save $100, it has the same effect on earnings as $1250 in sales. The formula for calculating sales equivalency is as follows:

Amount of Savings ÷ Profit Margin = Sales Equivalent
($100 ÷ .08 = $1250)

The smaller your net profit margin, the greater the impact your cost reduction becomes. In the example above, if your profit margin is 5%, the $100 of savings has a sales equivalent of $2000; with a 3% margin, the sales equivalent is $3,333.

What is the sales equivalent of a $100 saved in your company?

Here are a few examples of eye-opening sales equivalents from our company with an 8% profit margin.

A tweak to a telephone system saving $50 per month is equal to $7500 in annual sales.
Preventing $1000 of lost, damaged, or obsolete inventory in a year produces the same financial result as $12,500 in new sales.
An annual saving of $5000 by finding a better supplier of materials or products, reducing freight cost, taking advantage of purchase discounts, and so forth, is worth $62,500 in sales.
An improved business system or process that can perform a task with one less employee earning $25,000 per year and no benefits is equal to $312,500 in sales. YES, THREE-HUNDRED AND TWELVE THOUSAND, FIVE- HUNDRED DOLLARS!

Impact on Profit

Here’s another fact: The average small business has at least 3% waste or excess cost within its operations and often times much more. In our example of the business with 8% profit margin, 3% of waste equals 37.5% of lost profit (.03 ÷ .08). Remember: All waste comes straight off the bottom line!

Improving the quality and efficiency of your business operation—its systems and processes—is the gift that keeps on giving. The payoff continues year after year. In good times and bad, it’s always the right time to be cost-conscious!

What’s one way you could reduce costs today? Now, go do it!

A Cool Business System that Attracts Customers and Cuts Cost!

Ron Carroll

23 Feb 2011

Last week, my wife and I went to dinner at one of our favorite eating spots, Tucanos Brazilian Grill, a local chain of restaurants. They have a cool food-service system that is part of their brand but also saves them thousands of dollars every year.

The restaurant offers an all-you-can-eat buffet of tasty salads and side dishes, while entrée servers walk around from table to table with skews of beef cuts, barbecued chicken wings, bacon-wrapped turkey, pork, sausage, shrimp, grilled pineapple or vegetables, and so forth. They cut off slices or push pieces down the skewer for customers to grab with tongs and put them on their meat plate.

The Tucanos Cue System

Once patrons are ready for servers to visit their table with these delicious morsels, they turn the wooden “Tucanos Cue” with the green side up (go). If they need to pause or are full to bursting, they turn the Tucanos Cue over, with the red side up (stop). The servers immediately discontinue bringing selections to the table. Laying the cue on its side signals that customers are ready to pay their check.

Tucanos Cue - A Cool Business System

This distinctive method of serving the entrée makes Tucanos Brazilian Grill an unforgettable experience for customers. However, it is also a significant cost-saving strategy. Here’s how.

Fun and Profit Producing

A Tucanos Restaurant feeds an average of 1200 people per day with about fourteen entrée servers per shift. The servers visit the tables approximately fifteen times throughout the customer’s thirty-minute eating frenzy. They spend roughly ten seconds per person each time they visit. Were it not for the Tucanos Cue in the red position, my observation is that they would spend at least an extra sixty seconds per person during the meal with needless visits and chatting.

The average savings of one minute per customer is equal to 1200 minutes per day or twenty person-hours. The entrée server is paid $2.50 per hour by the company (tips are added). This amounts to a savings of $50 per day or $15,600 per year (Tucanos is not open on Sundays). The Tucanos Cue System enables the restaurant to provide a quality service with one or two fewer entrée servers than might otherwise be required.

In your business, using minimum wage employees for a five-day workweek, similar time savings would add up to a whopping $37,700 per year. A nice bit of change resulting from a little creative thinking, don’t you think? With the minimum wage going up, or higher-paid employees, the savings is even more impressive.

Where’s the Magic in Your Business Systems?

Remember, an effective business system is not just a flowchart or a checklist. The best systems include a mixture of left-brain and right-brain thinking that make your company a fun and motivating place to work and shop. The effort will translate into lower costs, repeat customers, and a thriving enterprise.

Become a Systems Thinker and you will discover the magic in your business!

Where Has Your Profit Gone—Eight Places to Look!

Ron Carroll

16 Feb 2011

Many business owners struggle to make cash deposits just in time to pay the bills that keep the grim reaper from the door. While owners should be focused on business development, customers, and profitability, they often get sucked into the day-to-day cash-flow crunch. This distracting pressure comes when cash flowing through the business is too slow and insufficient to meet daily requirements.

Keep in mind that profit and cash flow are two different things. Even if you aren’t profitable, you can have a positive cash flow for a while by working down levels of accounts receivable or inventory, or by borrowing money.

You can also experience negative cash-flow pressures even though you are profitable. This happens during growth periods when there is a buildup of assets such as inventory, accounts receivable, or equipment.

Having good cash flow and profit at the same time is the sign of a smooth-running business. However, even when things are going well, business owners often wonder (after seeing their financial statement), “If I made that much profit, where is it?”

Good question! Where does that slippery cash go? Let’s look at some of the places your working capital may be hanging out.

The Jar System

When I was a boy, most things were purchased with cash (there were no credit cards). My mother used a jar system to manage the family finances. When she cashed my father’s paycheck, she put the cash in jars marked “groceries,” “gas,” “charitable donations,” and so forth. It was a simple system to be sure she reserved enough money for each family-need.

Money Jar

Applying the jar system to your business, let’s take a look at where your cash is going—the obvious places, and the more subtle.

Jar #1 Your Bank Account – You should have enough cash in this jar to fund daily business operations and gradual growth. It is best replenished out of the company’s earnings. When this jar has enough money in it, stress goes down, efficiency goes up, vendors, bankers, and employees are happy, and there is time to do more important things. A healthy business has cash reserves.
Jar #2 Inventory – If you buy more inventory than you need, or you have items that don’t sell well, some of your “cash” is sitting on a shelf gathering dust. By turning your inventory over faster—lowering stock levels, improving product mix, or increasing sales—you will be able to move cash from the inventory jar to the bank account jar.
Jar #3 Fixed Assets – Did you pay cash for a piece of equipment, furniture, or vehicle? Did you remodel or improve your facilities? If so, part of your available cash was invested in business assets and infrastructure, a wise decision if the result is better productivity or customer service. Just remember, when assets are depreciated (expensed over time), the profit on your P&L statement will not reflect the entire cost of the purchase right away, thus showing a higher profit. However, you will feel the effect on your cash flow immediately.
Jar #4 Accounts Receivable – The more you sell with credit terms, and the longer customers take to pay you, the less cash you have to work with. You become a “bank” for your customers, giving them interest-free loans and temporarily tying up YOUR cash in THEIR jars.
Jar #5 Customer Giveaways – If your gross profit margin is too low, you are essentially giving your customers a better deal than you can afford to—and no, you can’t make it up with volume! Some of your potential cash income is permanently left in your customer’s jars. Be wary of trying to win customers strictly with a low price.
Jar #6 Waste – This jar contains wasted cash from your business operations—mistakes, returns, rework, and inefficiency. It also includes the cash you fritter away on needless overspending. For example, you continue to keep employees you can’t afford, to pay for building space you could do without, or to incur other expenses beyond what you need to successfully run the business. This often happens when sales are down, and you don’t (or can’t) cut costs proportionately.
Jar #7 Excessive Compensation – When owners or others take more cash out of the business for personal compensation than is justified by the profit generated, it can be a severe drain on working capital and cash reserves. Over time, you can “kill the goose that lays the golden egg.”
Jar #8 Stakeholder’s Reward – This is my favorite jar. It is the excess cash generated by the business that can be used to pay dividends and increase salaries. It eventually moves into personal jars or is used to build value in the business. With it, you can buy additional assets, greater market share, and good-will. You can also improve your internal business systems and processes for even more profit.

You Want a Cash Gusher!

Remember: the purpose of your business isn’t just to have your cash spin around from the bank account jar to the inventory jar to the accounts receivable jar. The true worth of your business is how much comes out the spigot and flows into your personal jar. You don’t want a drip. You want a gusher! This will happen when you realize that a cash shortage is the result of deeper problems. Get in The Zone and figure out what business systems are holding you back. Then improve them, and GIVE YOURSELF A RAISE!

Bottlenecks in Your Business Systems are Sucking Profit!

Ron Carroll

9 Feb 2011

I’m late! I’m late! My foot is leaning hard on the gas pedal as I haul down the freeway five-miles-per-hour over the speed limit (OK, maybe ten). If everything goes well, I will hit the green lights in town and arrive just in time for my appointment…. Oh no, a flashing light! Traffic is slowing. I can see the lanes merging ahead. I’m dead!

Traffic System Bottleneck

I just encountered a traffic bottleneck that has slowed me to a crawl.

If a warning light flashed at every point in your business where things were slowed down, or waiting to be worked on, you might be surprised by the number of bottlenecks in your operation. From an overflowing in-basket, to a stalled pallet of work-in-process, to a database of sales leads waiting for a follow-up, you could have profit-killing bottlenecks lurking everywhere (see Theory of Constraints).

What is a Bottleneck?

Let’s take a closer look at this system “bad boy.”

A bottleneck is any step within a business process whose capacity is equal to or less than the demand placed upon it; it’s not keeping up.

Bottlenecks are constraints that limit a system’s output. They can be physical or non-physical. For example, a physical constraint could be the capacity of a piece of equipment, limited space, or clutter. A non-physical constraint might include a company policy, negative attitudes of employees, or low product demand.

What is Your Throughput?

Bottlenecks in your business determine the speed at which you get things done—the throughput. These system-busters set the pace for the whole company, and if not addressed, they will not only slow sales, cash flow, and profit, but they can bring your business to its knees.

In my experience, insufficient sales are often the major constraint on the throughput of many small businesses. No matter how efficient the operation, without a steady flow of sales into the pipeline, the output is always disappointing.

Remember: The key is not just to remove a bottleneck in the step of a particular system or process, but to elevate the performance of any core business process that constrains the throughput of the entire company (e.g. Your lead-generation or lead-follow-up system is not producing enough sales; a lagging production system causes longer lead-times and slower sales throughput).

Can People Be Bottlenecks?

We all know a bottleneck when we encounter it. Ask any employee and they will quickly point them out. Sometimes we even feel frustrated with a person we think is the bottleneck. However, look for problems within the system or process before you blame people. More often than not, the person will perform better once YOU improve the business system. If the person is still not a good fit for the job, make a change.

What’s Holding You Back?

Now, consider your business goals, and ask yourself, “What is holding us back from achieving some of these goals? What are the obstacles or bottlenecks in our business systems and processes? How can we increase sales throughput?”

A little attention to eliminating bottlenecks can pay big dividends. Open your lanes of traffic and watch sales and profit accelerate!

Boost Your Business Profit by Adding the Fun Factor!

Ron Carroll

19 Jan 2011

The combination of great people and great business systems and processes produces great companies. When you add the elements of fun and competition, when you turn your business into a game and keep score, when you show your employees how they can “win,” you will discover the grand secret to developing a truly remarkable enterprise.

Do Your Employees Have Fun?

Volkswagen is dedicated to the idea that something as simple as “fun” can change people’s behavior for the better. They invited folks from around the world to submit their proposal for solving everyday problems by adding the element of fun.

One winner of the contest, Kevin Richardson, USA, asked the question, “Can we get more people to obey the speed limit by making it fun to do.” The idea was so good that Volkswagen and the Swedish National Society for Road Safety actually made this innovative idea a reality in Stockholm, Sweden.

A camera was set up on a section of road where people habitually speed. Every car going by is photographed and the speed recorded—24,857 cars in three days. Every speeding person is sent a citation and assessed a fine. The money from fines goes in a general pot. Every driver who obeys the law is also photographed and entered into a lottery with the chance of winning the big payoff. This fun reduced the average speed by 22% and largely solved the speeding problem.

Fun Factory - Camera Speed Lottery

The “Speed Camera Lottery” was one of numerous behavior-changing and problem-solving “systems” submitted to Volkswagen, For example, see how you can make it fun for people to throw trash in a bin rather than on the ground, or take the stairs instead of the escalator for better health. This fun-factor gets amazing results! (see Youtube: “fun theory” for more examples)

Fun-Factor - Piano Stairs

(View video: The piano keys on the stairs play notes when walked on.)

AND YOU CAN DO THE SAME THING WITH YOUR BUSINESS SYSTEMS AND PROCESSES!

One of the great challenges I have in helping people become Systems Thinkers is that they confuse systems with procedures. FUN is one of the elements you can use to turn a boring procedure into an amazingly effective and highly productive business system. I’ve seen system productivity double by adding this one element.

FUN – An Organizational Strategy?

Ann Bruce and James Pepitone write in their book, Motivating Employees, “Top organizations such as Southwest Airlines, Ben & Jerry’s, Starbucks, Disney, Nordstrom, Wal-Mart and Microsoft use fun as an organizational strategy. These leaders have realized that when employees are having fun, they just perform better.”

Team competition, bettering your personal best, financial incentives, victory celebrations, company recognition, pizza Fridays, summer picnics, and dozens of other things tied to performance can help to create a culture of fun and work excellence.

Remember: People usually work harder at play than they work at work! When an organization promotes fun, employees seem to have more energy, self-esteem, enthusiasm, and team spirit. This translates to higher productivity, more creativity, and better customer service.

Now go elevate your business systems and have some fun!

Turn Your Business Operations into an “Easy Button”

Ron Carroll

5 Jan 2011

A few years ago, the Staples “Easy Button” was one of those rare advertising messages that became part of the public vernacular. Don’t we all dream of having an Easy Button to simplify our multifaceted and often hectic lives?

Imagine for a moment you could just sit back and press the Easy Button and your business would run smoothly and efficiently, even when unattended by you.

Business Systems are Easy Buttons

Press the Easy Button and sales leads fill your pipeline.

Press the Easy Button and your products or services are delivered without errors, returns, or rework.

Press the Easy Button and customer problems are immediately solved, and loyalty restored.

Press the Easy Button and your bank account fills with a steady stream of cash.

NOW THAT WOULD BE A GREAT BUSINESS! WOULDN’T YOU AGREE?

Your Primary Responsibility

In my humble opinion, Mr. or Ms. Business Owner, your primary responsibility is to create or oversee the creation of Easy Buttons to run your business. And here’s how you do it.

Behind every magical—make it seem easy—button, there is a well-designed business system—a lead generation system, a production or order fulfillment system, a customer care system, and so forth.

A business system is a procedure, process, method, or course of action designed to achieve a specific and consistent result—to make a task easy, predictable, and even automatic.

People are constantly looking for a quick-fix to business problems. However, the solution is always the same. Build customer-pleasing, profit-generating, Easy-Button business systems. There is no other way!

Become an Easy-Button Engineer

Regardless of your product or service, you are a “business engineer.” While some engineers build bridges or high-tech equipment, you specialize in the design and implementation of Easy-Button business systems.

Effective systems and processes are the foundation for every smooth-running business operation. They are essential if you eventually want someone to run your company for you, or if success allows you to replicate the operation in other markets.

When you decide to sell your company, trust me, the buyer will be more interested and pay more money for a company that is a proven money-making machine. That is only possible with established, consistent, and reliable business systems and processes.

Making things easy for employees and customers is a big part of your job description. Quite honestly, it is a mark of genius.

The Box Theory™ eCourse and Software are the best tools available for creating Easy-Button business systems. Click below and let’s take the next step together.

Your #1 System!

Ron Carroll

22 Dec 2010

This is a special time of the year to reflect upon the blessings of life. One of our greatest blessings is also one of our most important and enduring systems.

Can you guess what it is?

The most time-honored system in all the world, and the most important system you and I can be a part of, is the FAMILY.

Family System

A very wise man once said, “No other success can compensate for failure in the home” (David O. McKay).

Family is the system that requires our best time and talents. It should be where our greatest passion lies. In the end, the results we obtain within our family system will be the best measure of our life’s work, and hopefully our crowning achievement.

No family systems are perfect, but like successful business systems, a good family continually grows and improves together.

You, my friend, are an essential component of your family system. Your amazing influence can make all the difference! As we enjoy this sacred season of gratitude and giving, may you experience a fullness of joy in your most important work!

What New Marketing Systems Could Double Your Sales?

Ron Carroll

15 Dec 2010

Dan Kennedy, marketing coach, declared, “All wealth is based upon systems.” He tells a story I would like to share with you. However, I will add another conclusion from a System Thinker’s point of view.

Dan writes:

“Mary S. was at a seminar I presented for doctors some years ago. She was there with her husband, a dentist.

Marketing a Dentist

“She pulled me aside on a break. ‘Could I talk to you alone for a minute?’ So she and I ducked out of the meeting room, went down the hall, and found an empty meeting room to step into.

“‘I’m so frustrated,’ she told me. ‘There are so many things you’ve been talking about that we could do to build up the practice. We keep going to seminars, hearing good ideas, but my husband never gets anything new implemented. Nothing happens. The staff now knows that when he comes back from a seminar talking about new ideas, all they have to do is wait a few days and it’ll all blow over. And the practice hasn’t grown a bit in three years.’

“‘What kind of things would you have him do?’ I asked.’

“‘Join the Chamber of Commerce, attend meetings and make contacts with other business people in the community,’ she said. ‘And start a mailing campaign to area business owners and executives. And put out a monthly newsletter for our past and present patients. And put together a little how-to book, something like How to Keep Healthy Teeth for Life. And, in the office, our reception area desperately needs re-decorated. The staff needs some help with handling telephone calls, especially from new patients calling in because of our yellow pages ad. And—‘

“‘Wait a minute,’ I raised my hand like a traffic cop and brought her to a halt. ‘Mary, these all sound like inarguably good ideas to me.’

“‘But he won’t do any of them,’ she said sadly.

“‘Well, Mary,’ I asked, ‘what are you waiting for?’

“For the first time that night, Mary was speechless. She returned to the meeting room with a particularly thoughtful look on her face.

“About a year later, Mary appeared at another of my many seminars for doctors. Again she cornered me on a break, apart from her husband. ‘I want to tell you,’ she began, ‘that I was very angry with you and the way you answered me that night. I wanted some sympathy. And I wanted you to go have a tough talk with my husband. But I sure didn’t want you to challenge me.’

“‘Should I apologize? I asked.’

“‘Hardly,’ she answered. ‘Let me tell you about my new life.’ Mary no longer worked in the office as a dental assistant. Instead, she had hired her replacement, then appointed herself Director of Marketing. She joined the Chamber of Commerce, a business women’s club, a Toastmaster’s group, and enrolled in a Dale Carnegie class. She assembled a book – Secrets of a Healthy Smile for Life – and she began speaking to groups of school children, PTA meetings, civic groups, everywhere she could on behalf of the practice. She put together a practice newsletter. . . . She designed a new Family Plan to promote to the practice’s patients. She created and promoted Patient Appreciation Weeks.

“In five months, the practice doubled in size” (Dan S. Kennedy, GKIC, The Ultimate Success Secret, 22-24).

The point that Dan Kennedy went on to make is that we have to take action. We have to implement our good ideas if we are to improve results. How could anyone argue with that?

However, as a Systems Thinker, I got something more out of the story.

The Secret to Doubling Sales

What Mary did to double sales was create unique marketing systems—the weekly-newsletter system, the Healthy-Smile-pamphlet-give-away system, the patient-Family-Plan system, the community-involvement-public-speaking system, the Patient-Appreciation-Week system, and so forth. These marketing systems made all the difference in growing the dental practice. You can do the same!

Unique and remarkable marketing systems will help differentiate your business in a crowded marketplace. They can make you “stand out like a purple cow in a field of brown cows” (Seth Godin). What is one new system you could implement soon to boost your marketing and double your sales?

Four Business Improvement Methods You Should Know About!

Ron Carroll

8 Dec 2010

Some of our nation’s best-run business organizations are driven by a compelling principle the Japanese call “Kaizen”—the ongoing, systematic, incremental improvement in the way things are done. Many companies have adopted one or more formal methodologies to achieve this “continuous improvement.” However, these powerful strategies are rarely considered by small-business owners—a fact I hope to change!

Continuous Daily Improvement

Four Improvement Methodologies

Below I’ve listed four widely used business-improvement methodologies and my layman’s description of their essential nature and purpose. Keep in mind that these methods aren’t just for big organizations. They also apply to YOU and your everyday business processes such as marketing, hiring, production, customer service, order fulfillment, and so forth. They are relevant to both service and product-based companies. They can be applied in the office, the retail store, or on the production line. Think about how each may be used to improve YOUR business!

Six Sigma – Every system or process in your business yields an end-result that either falls within a range of acceptability, or does not. Six Sigma measures how often a process meets the required specifications or expectations. It seeks to improve the quality of a process by identifying and minimizing errors, excessive variation, waste, and rework.Six Sigma is a statistical term (six standard deviations) that represents near perfection—3.4 errors per one million opportunities-for-error. Thankfully, airlines have achieved better than Six Sigma, fewer than 3.4 crashes per million flights. Don’t worry; you don’t have to know statistics to benefit from this method!Typical small-business systems and processes use common sense and trial-by error solutions to achieve about 2-3 Sigma, or one error per 5-15 opportunities—a profit killer! You would be surprised to learn the number of problems and amount of rework that occurs every day in your business regarding customer invoices, widgets manufactured, applications processed, products installed, and so forth.Applying Six Sigma strategies to your business systems will enable you to get errors and rework below one percent and dramatically boost profit. Most of the hidden waste in your business can be eliminated if you know what you are looking for. And trust me, it’s everywhere!
Theory of Constraints – Every process within a business has a bottleneck or weak link—constraint—that diminishes the output of the process. By focusing improvement efforts on the weakest area of a process (or the weakest system of the business), you will achieve the greatest impact on sales, customer satisfaction, and profit.Constraints that limit output can be physical, such as the capacity of a machine, the number of people working on a task, weather, or availability of materials. Non-physical constraints might include a company policy, attitudes of employees, or limited product demand. In other words, constraints reduce the output speed, or throughput, of your business systems and processes.If you eliminate the bottleneck or strengthen the weak link, you will not only elevate the system but the entire business. For example, a single forklift in a warehouse prevents truck-loading from keeping up with shipping demands; it is a bottleneck. By adding a second forklift, loading is no longer a constraint to the process and all scheduled shipments go out on time. Sales throughput is increased. There are other ways to eliminate this constraint besides buying a second forklift. Can you think of any?
Lean Thinking – In Lean Thinking, a step in a process is said to be “value-added” if it ultimately benefits the customer, and they would be willing to pay for it. Things that do not add value to the customer such as idle time, inspection, mistakes and rework, overproduction and storage of inventory, and unnecessary handling or movement, are considered waste. They add needless costs to a product or service. For example, a step to “touch up” furniture scratched in the delivery process (non-value-added task) should be eliminated by measures that would prevent the scratches in the first place.
Box Theory™ – Box Theory™ is a methodology that breaks your business functions down to manageable systems or “boxes,” concentrating on the vital few that drive success, and elevating them to higher-performance levels. You improve business results by applying the basic principles of Six Sigma, Lean Thinking, and the Theory of Constraints to your core systems and processes (the boxes). The Box Theory™ Way is simple and intuitive, patterned after nature’s processes. Improvement efforts focus on six essential areas—process, components, people, quality, speed, and measurement. Box Theory™ is specifically designed for the budgets and busy schedules of small-business owners and entrepreneurs, like you!

Continuous Improvement is Endless

Remember, without a conscious effort to improve quality and efficiency—using recognized principles and techniques—you will hover in the 2-3 Sigma range and lose a significant portion of your potential profit. Effective business systems unquestionably pay for themselves many times over, and they’re actually easy to develop once you know how!

Don’t let myths about process improvement prevent you from taking the next step. Entrepreneurs and business owners everywhere will eventually have to learn these principles to stay competitive and excel in the 21^st century. I hope you won’t be left behind.

Vegetables, Exercise, and Business Systems

Ron Carroll

3 Nov 2010

When I was a kid, I instinctively knew I did not like vegetables. I didn’t even have to try some of them to know—like broccoli, cauliflower, and peppers. However, my mother wouldn’t let me leave the dinner table until they were gone. She always said, “Eat your vegetables. They will make you healthy.”

Business sytems are like vegetables

When I became a pot-bellied adult, I knew I didn’t like exercise because I tried it once. However, my doctor said, “You’re getting too fat. You need to exercise if you want to stay healthy.”

When I became a half-baked business owner, I read Michael Gerber’s book, E-Myth Revisited, and knew I needed better business systems. I was lazy at first, but couldn’t shake Michael’s persuasive argument for having a healthy company: “Let systems run the business and people run the systems,” he said.

Vegetables, exercise, and business systems are all things we know are good for us, even vital to our health—but oh, the torture!

Wouldn’t It Be Nice?

How great would it be if you could just pay someone a few dollars to eat your vegetables, and YOU would become healthy? Or pay someone to go through a grueling exercise program for you, and YOU would become the physical specimen?

Sadly, this is not possible!

However, there is good news. While eating vegetables and doing exercise can’t be hired out, creating effective business systems and processes can—and at a very low cost!

The truth is that most system-building is pick-and-shovel work. You need to get some inspiration in The Zone to identify problems, set priorities, and hatch the big ideas, but YOU don’t have to do all the detail work yourself. You should lead the charge and provide oversight, but let lower-cost individuals hammer out those pesky details. Box Theory™ Software for small and midsize businesses makes this a snap.

Works Like a Charm!

The best solution I have found is to hire one or more college students—usually business majors—to work under my direction. Students are bright, eager to learn, and inexpensive. Of course, they must learn the underlying principles of system development, but that isn’t difficult.

I’ve employed dozens of college students over the years with great success. Some high-schoolers are also capable. Learning the Master Skill of system development can be an invaluable experience for these future business leaders! Even secretaries or assistants with a little time on their hands can get involved.

Look, I’m amazed that they don’t teach high school kids all about managing money, one of life’s fundamental skills. I am also amazed that business schools don’t teach the art and science of system development; the principles are profound, and they govern all business activities.

In my humble opinion, every company should have someone focused on the vital task of creating and improving business systems and processes. It takes daily discipline and persistence, but WOW, the payoff is enormous!

This morning I did an hour of exercise and munched on a bowl of raw vegetables. There is no other way to be healthy. However, I’ll let one of my eager-beaver students—using Box Theory™ Software, of course—build the systems that will make my business shine! I recommend you do the same.

Business Systems and Processes^.

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