Business Systems and Processes.

The Systems Thinker Blog

A Business System When the Wolf is At the Door!

Ron Carroll

Whether due to a struggling economy, a slumping industry, or inevitable business cycles, many small- business owners at some time experience a decline in sales and profit, and a tightening of cash flow. When there isn’t enough money to go around, financial issues dominate our thoughts and daily business activities. If we are not careful, this challenging condition can also tarnish our shiny reputation with vendors and bankers.

I’ve been through this uncomfortable experience myself, and I’ve also helped customers of my accounting practice. I know the feelings of frustration and embarrassment. When you are powerless to pay your bills, you just want to bury your head in the sand. I get it, but please don’t do that! Instead, create a business system to get you through the (hopefully) temporary ordeal.

Avoidance

10 Tips to Hold Your Head High

Here are a few things you can do to turn your creditors into rooting fans:

  1. Be proactive. Don’t wait for your creditors to call you. They will call at all times of the day and continually distract you from doing the most important things, like increasing your sales. Set a little time aside every morning to call them when you are fresh and upbeat.
  2. Be reliable. If you tell the collection person you’ll call them next Monday, DON’T FORGET TO DO IT, even if the news is bad. This builds trust, and they will actually be impressed because most people avoid these painful calls.
  3. Be humble, apologetic, and calm. Don’t react if your creditor displays a harsh attitude. They have a right to be unhappy. Just accept it. Responding with humility will ease the tension; “a soft answer turneth away wrath” (Proverbs 15:1).
  4. Acknowledge the full amount of your debt. Though usually not spoken, your vendor will be relieved that you are not trying to find excuses or weasel out of paying the bill. If you dispute the amount, clear it up immediately. Get everyone in agreement going forward.
  5. Be honest and straight forward. Don’t exaggerate how much you can pay or how soon you can pay. Carefully manage expectations. If you can pay a little more or a little sooner than promised, you will get a gold star on your forehead.
  6. Pay small invoice amounts in full and on time. For example, pay everything under $250 or $500 by the due date. This goes a long way in reducing the volume of collection calls and letters. You now only have to deal with your larger vendors.
  7. Communicate often. It may be a good idea to email a general progress report to creditors each week, or periodically. When vendors get updated information, it soothes the savage beast, builds trust, and lets them know you are doing the best you can. And again, regular updates reduce those pesky phone calls.
  8. Set up a payment plan. Reduce the balance owing on past-due invoices while still buying more products or services. Make partial payments when you can. If necessary, establish a C.O.D. arrangement to alleviate their fears. Most vendors want your business. They know the economy is up and down for a lot of companies. They will work with you if they can see your effort and trust your word.
  9. Do not fail to pay payroll taxes. I have seen many desperate business owners make this deadly mistake, running up large penalties and interest. In the U.S., you are personally liable for payroll taxes. They will never go away. Furthermore, if you are not meeting your payroll on time, your business is at serious risk. Get help fast!
  10. Extreme circumstances call for extreme measures. Helping a customer, I once offered many of their larger vendors a 50% immediate cash settlement. I was amazed at how agreeable they were. The amount covered their direct costs (materials and labor), and they were grateful not to get stiffed on the whole bill. This, of course, is a last resort when you are running out of options. Most vendors will appreciate your honest and even heroic effort to help them cut their losses.

A Time to Build Character

Ninety percent of the time, business owners go into an avoidance mode when they are in financial trouble. Don’t let this happen to you. It is the worst possible thing to do. All trust is lost, and bridges are burned. Your personal integrity—and most valuable business asset—is permanently scarred.

Difficult times can be an opportunity to strengthen vendor relationships and earn respect. It is a time to show your true character. A good business system for communication can help you accomplish this and get you through even the most adverse circumstances.

Remember: Everyone—customers, employees, vendors, and bankers—want you to succeed. They are all cheering you on. So am I!

Six Problems That Can Sabotage Your Business Systems!

Ron Carroll

As previously discussed, the Law of Cause and Effect says that everything happens for a reason; for every effect, there is a specific cause. Outcomes in a business organization—good or bad—are traceable to a series of identifiable causes.

Looking closer for business problems

Six Sources of Business Problems

When looking at your operations, nearly all frustrations and problems stem from six basic sources that you should be able to spot and remedy.

  1. Human – A person is not a good fit for the job, not skilled or properly trained, not motivated, or perhaps doesn’t get along with their supervisor or peers.
  2. Process – The business system or process is poorly designed, communicated, or executed. Half-baked systems always produce inferior results until they eventually fail.
  3. Policy – You have a company policy that hinders performance. For example, over-ambitious production goals cause hurry and sloppiness. A policy not to take checks or credit cards causes a loss of sales.
  4. Equipment – Machinery or equipment is outdated, slow, or worn-out, causing downtime or excessive waste.
  5. Materials – Low-quality materials cause inefficiency, rework, or customer complaints.
  6. Environment – The work environment is not conducive to high-productivity—too hot or cold, dangerous, cluttered and disorganized, stressful, and so forth.

Each of these general causes of poor performance provides a starting point for getting to the root cause. Identify your problem. Ask employees or customers for their perspective. Then fix the step or component in the business system that will correct the problem.

Common Sense

A few years ago, I tried to help a struggling family get a past-due mortgage payment made. I told the bank representative that I wanted to make a payment on their behalf over the phone. The representative said she couldn’t take the money because my name was not on the loan. I won’t judge the bank because there may be issues I don’t understand, but can you imagine a company policy that won’t let you take past-due money?

A water faucet leaking one drop per second wastes over 2000 gallons in a year. In the same way, a bad policy, a faulty piece of equipment, a messy work environment, an ineffective business system, low-quality materials, or the wrong person in a job can also waste many dollars.

Sometimes your business problems are easy to spot, but often they require a little digging. A 5-Whys Analysis can be very useful to uncover less-obvious root causes.

And keep this in mind: the good results in your business also have specific causes. Identify your reasons for success and apply them to other areas of your operation. As they say, “run with your strengths.”

What Law Determines the Outcome of All Your Business Systems?

Ron Carroll

Natural law governs everything you do in your business, whether you realize it or not. Recognition and obedience to law improve your chances of success while disobedience hinders progress. Even if you violate a law unknowingly or unintentionally, there is a price to pay in frustration, underachievement, and even failure. You can’t escape the consequences!

The Law of Cause and Effect

One of the most fundamental of these laws is Cause and Effect. Everything happens for a reason; for every effect, there is a specific cause. Outcomes in a business organization, good or bad, are traceable to a series of identifiable causes. Change the cause and you change the effect or result.

In the Bible, this law is known as the Law of the Harvest. “For whatsoever a man soweth, that shall he also reap. . .” (Galatians 6:7).

Law of the HarvestBusiness leader and author, Brian Tracy, teaches:

“The law [of Cause and Effect] says that achievement, wealth, happiness, prosperity, and business success are all the direct and indirect results of specific causes or actions. This simply means that if you can be clear about the effect or result you want, you can probably achieve it. You can study others who have achieved the same goal, and by doing what they did, you can get the same result” (The 100 Absolutely Unbreakable Laws of Business Success, 14).

Best Practices

We commonly refer to tried and proven business systems and processes as “best practices.” They are currently the best-known way of doing something. When you follow them precisely, you can expect a consistent and predictable result. However, further innovation may reveal an even better way—a new best practice!

Whether you want additional sales leads, faster collection of receivables, more productive workers, higher-quality products, happier customers, and so forth, you need only examine the business system causing your current result. Then you must improve a step or component part of the system to get a better result.

As a Systems Thinker you are on a quest to learn and apply the laws, principles, and best practices that govern your business activities. The Law of Cause and Effect is the basis for all your systems development and the fundamental law upon which all business improvements are made.

If you want anything in your life or businesses to get better, you must first discover what system or process causes the current condition, and then elevate it to a higher level of performance. There is no other way!

Related Article:
Cause and Effect: Your Business Results are Exactly What You Deserve!

Effective Business Systems are Your Greatest Asset!

Ron Carroll

A recent email from Linkedin posed the question, “What is the most important asset of your business?” There were twenty-four responses elaborating on such things as the business owner, the customer list, the brand, the business model, the marketing strategy, and even less-tangible things like attitude and creativity. However, the number-one response was “people”—customers and employees.

Who among us would not agree that people and relationships are of tremendous importance to the success of our business?

However, I would disagree that people are the most important asset. Here’s why.

In the strictest sense, assets are tangible items on a balance sheet that can be bought, sold, and controlled. They include such things as cash, inventory, intellectual property, buildings, equipment, or even a client database.

However, people come and go, and you have no control when one of these valuable “assets” decides to say goodbye and walk out the door. It is a mistake to build a business that is dependent upon individual people, especially superstars!

Your Most Valuable Asset

In my opinion, your most important assets are the effective business systems and processes you have created that consistently produce desirable results. A system for catching fish is more valuable than any individual fisherman. A system for winning at sports is of greater value than any one player. A system to make money in business should transcend the value of any single customer or employee.

Money Making System 3.jpg

Think about it. If you were going to buy a business, and it had mature systems for marketing, hiring, customer care, and providing quality products and services—systems that get results day-in and day-out, and constantly generate a monthly profit—wouldn’t that be a strong incentive to make the purchase?

Michael Gerber—author of E-Myth Revisited—said, “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.”

Yes, people are often the most important component within your business systems; however, the systems are your most indispensable long-term asset.

Valuable people are those who help you create or improve the business processes that make your company remarkable. While it is good that your sales manager can produce sales, it is crucial that he or she can create effective lead-generation and sales-conversion systems.

Invest in Business Systems

A business that succeeds primarily from the talents of its exceptional people is always one step away from losing its “assets.” On the other hand, a company with effective business systems and processes has assets that are secure regardless of what individual people choose to do.

If you don’t believe that successful business systems are your most important asset, just ask a franchise owner. Proven systems and processes are what they paid a lot of money for.

I hope you will consider Box Theory™ Software to manage and protect your greatest business assets, the systems, and processes that could become the foundation of YOUR “franchise prototype” (Michael Gerber).

5 Ideas to Jump-Start Your Business System Development!

Ron Carroll

The next time you drive to work, notice all the systems going on around you—roads and intersections, traffic lights, signs, sprinklers, curb and gutter, power lines, automobiles, crosswalks, and so forth. Each system was created to accomplish a specific purpose.

City Streets System

Similarly, the moment you walk through the door of your business, you are confronted with the systems you or your employees have created. Pause for a moment and look around. How many business systems can you identify? How well are they performing?

I’ve been in many businesses over the years, and I can usually spot system weaknesses very easily. Put on your Systems Thinker hat and you too will quickly see problems and inefficiencies. However, noticing the system flaws does not improve them one bit. You have to take action!

What’s Your Plan?

The hardest thing about creating effective business systems and processes is finding the time and having a game-plan that works. The road to the small business scrap heap is paved with good intentions, so you can’t put off this important task.

Below are five elements of a good system-development game plan.

  1. Get in the Zone for an hour each day (preferably in the early morning) doing the things that matter most. Work on your business not just in your business (Michael Gerber). This is where the inspiration flows, and great ideas come. It is the most important hour of your day!

    Not to be too salesy, but my ebook, “Box Theory™: Double Your Profit with High-Performance Systems and Processes,” will get your juices flowing.

  2. Become a Systems Thinker. As you walk around your business operation, look at everything from a systems perspective. Use customer or employee feedback, performance and financial data, and personal frustration to guide your problem-solving priorities. Discuss your observations and ideas at your next team meeting.
  3. Larger companies should establish a system-improvement management team; the business owner often takes the lead. The team leader—whoever it may be—is responsible for all improvement projects and has the authority to make decisions for the company. Owners of small to midsize businesses can form a temporary system-improvement committee for each specific project. “Teamwork allows common people to attain uncommon results” (Andrew Carnegie).
  4. Create a regular time and location—at least weekly—for system improvement workshops. Identify the bottlenecks and weak links of your business processes. Discuss ways to innovate and achieve better results. There are no meetings more important than those that elevate your business systems for finding and serving customers, and for taking waste out of your business operations.
  5. Determine how your system documents will be formatted, bound, and saved. (e.g., pdf files, binder, file cabinet; cloud). Store your library of checklists, forms, and resource materials for easy access by team leaders. Alternatively, get Box Theory™ Software, which will instantly do all this tedious work for you.

Don’t Put It Off Any Longer

Your need to create effective business systems and processes is never going to go away. You have to do it, and the sooner the better! Good business systems make life easier, save you time and money, and are the foundation of every great business endeavor.

Make the commitment today. You can do this! And let me know if I can help.

Related Article:
Four Easy Steps to Creating a New Business System

The Business System that Can Make or Break a Company!

Ron Carroll

I recently spent six weeks trying to find and fix a water leak on the roof of my house. I finally gave up and called several professional roofers for a repair estimate. Four company representatives showed up in the next two days to bid the job. As it turned out, the repair required removing shingles and siding to replace the metal flashing between a first-story roof and a second-story wall.

Roof Repair Worker

As usual, I noted the different systems used by each company for estimating the cost of the job. “Different systems,” you ask? Isn’t an estimate an estimate?

Well, this is where many business owners go wrong. They minimize the importance of the system details regarding a customer contact—in this case, the Job Estimating System. With most construction work, this is where the buying experience begins, so it better be good!

How to Lose Sales

Here are some of the things I was not impressed with during the bidding process.

  1. Two roofing companies didn’t answer their business or mobile phone. It took several calls to contact them. Most of the time that would result in a lost opportunity.
  2. Two of the four estimators arrived late to the appointment, ill-prepared, and with nothing to take notes or measurements.
  3. One man seemed like a roofer’s helper, inexperienced, and without confidence about how to solve the problem.
  4. Two bids were pulled out of the air, more of a guesstimate than an estimate. Likely, they would either overestimate and lose the sale or underestimate and do the job without a profit. Either way, they lose.
  5. One of the bids was three times the cost of everyone else. How can you stay in business when you are that far off the mark?

How to Win Customers

Tony, the person I hired, was the first to arrive. He said he specialized in roof repairs and informed me that he had been doing repairs for twenty-three years. Tony knew exactly what the problem was and confidently explained it in detail. He was respectful and patient with my questions. He knew the brand and the color of the existing shingle and had samples in the back of his truck. He also had a special tool for dealing with the siding that had to be removed. Tony assured me that my roof would look like there had never been a repair and that his work would last for the life the roof. His price was in the middle, but his presentation was compelling.

I asked Tony how he got his customers. He said that he tried to do every job so well that people would tell their friends and neighbors. Now that’s what I call a great lead-generation system!

To be honest, I don’t know how well the other companies acquire new customers. They may have been good roofers, but it wasn’t communicated well on the first visit; they certainly didn’t have a polished Estimating System. However, with a few little changes to the sales presentation, they could easily increase their sales!

Make the First Contact Memorable

Now, you may not be a roofer, but you do have customer contacts all the time. And every customer contact can make or break a relationship.

Take a look at your business system for engaging with customers the first time. Is it so compelling that they would be a fool to choose anyone else but you?

What can you do to WOW your customers and set yourself apart from the competition? A little effort and innovation with the first customer contact can pay big dividends!

Tony does it right—and so can you— with a little Systems Thinking!

How to Calculate Your Business Break-even Point!

Ron Carroll

Calculating a business break-even point is not difficult. However, there are a few things you need to know in order to make it as accurate as possible.

As a review, your monthly break-even point is reached when your gross sales revenue equals your total fixed and variable costs; it is the point that your business begins to make a profit. (Please read “Do You Know Your Sales Break-even Point?” for more about this principle.)

Get Your Profit and Loss Statement

To begin, you need a copy of your “Profit and Loss Financial Statement.” If possible, get a printout that shows year-to-date information and the percent of sales for each line item. Divide the year-to-date total for each item by the number of months to get the average monthly expense (e.g., If your power bill through June is $2742, your average monthly power bill is $457). Averaging multiple months will minimize the effect of any unusual expenses in a single month.

Don’t forget to include the monthly portion of line items paid on a quarterly or annual basis such as payroll taxes or insurance. For example, if your annual insurance charge is $9,000, use 1/12 of that amount, or $750, as part of your monthly budget for calculating the break-even point.

Categorize Costs

Looking at individual line items, you will first decide which costs are fixed, which are variable, and which are a mixture of both. Let’s discuss each possibility.

  • Fixed Costs – These expenses are dollars paid or accrued each month, even if you don’t make a single sale. They include such things as rent, insurance, utilities, equipment leases, contracts, accounting fees, and so forth. Fixed costs are sometimes referred to as overhead or administrative costs.
  • Variable Costs – These expenses are directly related to the products or service you deliver. They include line items such as materials, supplies, labor, and shipping expenses. Variable costs are generally referred to as cost of goods or cost of sales, and are best represented as a percent of sales. For example, the cost of materials and labor might be 50% of the sales price.
  • Mixed or Semi-Variable Costs – These costs are part fixed and part variable. If they are not broken out separately on your Profit and Loss Statement, you will have to estimate them for your break-even analysis.

For example, some of your wages may be administrative (fixed), while other wages are related to the products made or services performed (variable).

Your utilities, such as lights and heating are fixed; however, power to run equipment for manufacturing a product is a variable cost. The amount varies according to production demands.

If you have a marketing budget that is a percent of sales, this would also be a variable cost—the more you sell, the more you can spend on advertising. If you have a minimum monthly advertising expenditure or set media contracts such as radio, television or newspaper, these costs are fixed; you pay them every month, even if they don’t generate any sales.

In a final example, let’s say you hire a new sales person and want to use a break-even analysis to discover how much more you need to sell in order to cover his or her cost. If the sales person is paid a salary, the cost is fixed, if paid a commission, the cost is variable. Paying a salary plus commission or bonus would be a mixed cost.

I think you get the idea. Keep in mind that costs change and expenses tend to creep up. Recheck the numbers periodically. Caution: the break-even point is dramatically affected by hiring new people without a corresponding increase in sales.

Calculate Your Break-even Point

The formula for computing your business break-even point is described below. Don’t worry if it doesn’t quite make sense. I have provided a spreadsheet tool so you can just plug in the numbers. Remember to use amounts for the average month.

Break-even Formula

Lower Your Break-even Point

As mentioned in my previous article, there are four ways to reach your break-even point earlier in the month and begin making a profit sooner.

  1. Lower your overhead (fixed costs) – Keep fixed costs to a minimum and resist the temptation to increase them, unless absolutely necessary. It’s very hard to go back if sales drop. However, don’t cut costs too deeply, especially if there is a negative effect on customers or employees.
  2. Lower the cost of each product or service sold (variable costs) – By lowering direct costs, your gross margin will increase. Be diligent about purchasing material at the most favorable price, controlling inventory, or improving the productivity of your workforce.
  3. Increase your prices (and gross margin) – Most business owners are reluctant to raise prices because they think sales will decline. More often than not, that doesn’t happen, unless you are in a very price-sensitive market. Raising prices only a few percent will have a significant effect on your break-even point. There is a delicate balance between sales volume and pricing, so be cautious about changes, and test if you can.
  4. Increase your sales – The toughest job of most small-business owners is to increase sales. A business owner nowadays must be an outstanding marketer, or able to hire one. Never stop trying to improve marketing and sales strategies. Keep the pipeline full. Push every order you possibly can out the door by the end of the month, and then do it again next month. You make all your profit on those last few sales. And remember, a bad month can wipe out the profit of several good months.

As a Systems Thinker, your first thought is, “What business process do I need to improve to reach my financial break-even point sooner in the month? How can I make my administrative systems—hiring, accounting, computer support, custodial—less costly? Can I improve my purchasing system to buy materials or supplies for less? Can I reduce labor costs without affecting customer service? Could I change my pricing system or terms to squeeze out a little more profit? Can I improve my lead-generation or sales-conversion processes to close more sales?

You might be surprised by how many opportunities there are to cut overhead costs or create more margin from the sale your products or services. Those opportunities are just waiting to be discovered as you work on your business in The Zone.

Motivate Your Employees

By the way, if you work within tight profit margin, it is a good idea to let employees know your break-even point. This gives them a clear picture of expenses and what it actually takes to run the business. It also motivates that little extra oomph at the end of the month to get orders done and out the door.

Many companies fail because owners do not know this single number—the sales break-even point. DON’T LET THAT HAPPEN TO YOU!

Related Articles:
Do You Know Your Sales Break-even Point?
Access a Spreadsheet for Doing a Break-Even Analysis

Do You Know Your Sales Break-even Point?

Ron Carroll

Do you know how much profit you make each month, and when you make it? Would you be surprised to learn that you don’t make a profit on every product or service you sell?

Here’s how it works: Your business has fixed costs that you have to pay every month—rent, utilities, insurance, and so forth—even if you don’t sell a thing. Hopefully, as you sell your products or services, you have money from each sale to begin covering those fixed costs. Sometime during the month, you will receive enough income to pay all the current overhead costs of your business—a significant milestone.

Up to this point, you haven’t earned a dime of profit. Your money has gone to pay the fixed costs and the costs that went directly into the products or services you sold, such as materials, labor, shipping, and so forth. These are variable costs because they depend on how much you sell.

When Total Revenue = Total Cost

At the moment your revenue from sales is equal to your total fixed and variable costs, you’ve reached your financial break-even point. You begin to make a profit for the first time.

With a quick calculation, you can determine the sales volume necessary to accomplish this goal; however, it can be a little scary. Many businesses don’t reach their break-even point and become profitable until the last few days of the month. Up to that time, they are just covering costs—passing income along to vendors, employees, and Uncle Sam

Sales Break-even Point

If your break-even point generally comes late in the month, and sales drop a little, you can find yourself on the last day with nothing to show for your hard work but a good time. There is no profit, and likely a loss. A new month begins and you start all over again to pay rent, utilities, insurance, and so forth. You can never change the financial outcome of the past month.

So, your objective is to reach the break-even point as early in the month as possible. The sooner you arrive at this all-important day, the sooner your profit begins to accumulate for the remaining days. The number of days left in the month after reaching your break-even point is your margin of safety. The more the better!

You can do four things—and four things only—to achieve your break-even point earlier in the month:

  1. Lower your overhead costs (fixed costs)
  2. Lower the cost of each product or service sold (variable costs)
  3. Increase your prices (gross margin)
  4. Increase your sales

Each of these strategies points to one or more business systems that need to be improved. Can you name them?

A Margin Trick

Here’s a trick to increase profit, but you have to be careful with it.

Our local Golden Corral Restaurant has a killer deal for seniors between 1:00 and 3:00 p.m. The price of the meal is low and covers the variable costs such as food and labor. It also contributes to the fixed costs, but the meal is not considered profitable. The upside for the restaurant is happy seniors who spread the good word, continuous sell-through of hot and fresh food during the slow time of day (less waste from sitting around), more productive employees, additional seating space for full-price customers during the busy dinner hour, and an overall increase in sales dollars.

Beware: This discount tactic also lowers the margin on the average meal for the restaurant. However, the upsides mentioned more than compensate for the downside. While the profit margin as a percentage of sales goes down a little, the total number of profit dollars goes up! The problem comes when you discount too much and lower the gross margin on your product without an adequate upturn in sales volume. You’ve just cheapened your whole business and not improved your break-even point.

Which Describes Your Business?

I’ve seen companies hit their break-even point halfway through the month and make a boatload of money thereafter.

I’ve worked with businesses that reach break-even near the end of the month and wonder where their profit is and why they are always struggling with cash flow.

I’ve also seen companies frequently fall short of their break-even point. They get along for a while living off cash from a decreasing inventory and/or vendor credit terms, but they are doomed unless they apply one of the four remedies described above. After all, profit is the lifeblood of every business!

Do you know what your break-even point is—at what time during the month you begin to make a profit? A Systems Thinker knows the answer to this question. Check out the links below to learn how to calculate your break-even point.

Related Article:
How to Calculate Your Business Break-even Point
Access a Spreadsheet for Doing a Break-Even Analysis

Business Systems are Your Remedy for Frustration!

Ron Carroll

Recently, I sat near a man and two women in a Subway Restaurant who were having a business lunch together. Their voices and their blood pressure were raised. I’m sure the people around could hear everything they were saying. It was pretty much a rant about their boss and work environment. With each stated frustration, I couldn’t help identifying the faulty business system that was the root cause (the burden of a Systems Thinker).

Frustrated Man

The business owner is apparently unaware of the incredible frustration his or her employees are experiencing. My guess is that customers have similar feelings. Although the owner may be oblivious to the cause of the problems, he or she likely has a sense that things aren’t going well.

Frustration usually hits me in the gut first; I feel it before I think about it. How about you?

A Symptom of Deeper Problems

Feelings of frustration happen to some degree in every organization; however, this reaction is merely a symptom of deeper business problems—problems that cost money, drive away customers and employees, and create a negative company culture. An undercurrent of constant frustration is the sign of a sick company.

Frustration exists when there are recurring events over which you feel little or no control. Control can be restored—and undesirable patterns eliminated—by installing effective business systems. How many of the problems, obstacles, or frustrations listed below do you have?

  • Your customers complain, don’t re-order, or drift to competitors.
  • There is too much inefficiency, waste, rework, or returns.
  • You can’t seem to hire or keep good people.
  • Workers aren’t productive or motivated; labor costs are high.
  • You don’t have accurate or timely financial information.
  • You don’t know your true costs; profit is lower than expected.
  • Accounts receivable collections are slow.
  • Your cash flow is poor, hard to manage, and stressful.
  • You don’t have enough working capital for new people, equipment, or inventory.
  • Your advertising isn’t working; sales are down.
  • Your business environment is disorganized, untidy, or chaotic.
  • You’re the only one who can do the work right.

Find the Cure

These and other frustrating problems take hard-earned money out of your pocket every day. Amazingly, they all reflect the same underlying problem—a problem you can cure!

Running a business is not easy, but constant frustration takes away all the fun and satisfaction. Frustration and its accompanying side effects—ulcers and headaches, anger, blaming, and low employee morale—is a business cancer that can only be cured with systems therapy.

What is the greatest frustration you have with your business operation? Go ask employees or customers what frustrates them about your company? Face the brutal facts and then create high-performance business systems to cure the patient.

There is no other way!

With Business Systems, Cheaters Never Prosper!

Ron Carroll

When I was a kid on the school playground, I sometimes heard the chant, “Cheaters never prosper!” In business, cheaters often get the upper hand for a moment, but never for long. Violations of true principles and laws always exact a price. The natural consequences can be swift and dramatic, or more subtle such as damage to personal character and reputation.

One of the great experiences of life is to associate with people of noble character; they are unwavering in good times and bad. When they become Systems Thinkers, they seek to build their business—and business systems—upon the same principles of integrity. Let me explain.

Build your business with integrity

Create Honest Business Systems

Billionaire and philanthropist John Huntsman titled his book, “Winners Never Cheat.”

Low-grade, half-baked, seat-of-the-pants business systems that do not incorporate sound principles are a form of cheating—expecting to get good results without paying the price. Substandard business systems and processes are destined to falter as are the people who create and operate them.

Sadly, the government thinks it can cheat and get away with it. For example, many countries create money out of thin air by merely running their printing presses. This is done to compensate for bad policies, reckless spending, greed, and corruption. You and I (and our children) will eventually pay the price because, as they say, “there is no free lunch.”

Arian Forrest Nevin, J.D., author of “National Economy: The Way to Abundance,” said this about the U.S. financial system:

“The economy continues to decline solely because the money and economic system are not properly understood and structured. If we had the proper systems and a correct understanding of the relationship between money and physical wealth, the economy would immediately begin to improve.

“Economists like to pretend that the economy is like the weather, sometimes good and sometimes bad. There are bad spots we just have to endure. Why? There is no physical reason. Our ability to work and produce has not changed at all. The dishonest money system causes economic instability resulting in cycles of boom and bust. The simple solution to the problems caused by the dishonest money system is an honest money system” (emphasis added).

In government, we need honest people who follow sound economic policies to create systems and processes that produce consistently good financial results. We need an “honest money system!”

Good Systems Build Trust

In business, you and I need the same thing—systems built with integrity. No cheating of customers, employees, or even yourself. The Golden Rule is a standard: do unto customers and employees as you would have them do unto you. Create business systems that serve well—THAT BUILD TRUST!

Customers buy from those they trust. Employees like to work for those they trust. Business systems and processes that are steady, reliable, and produce good results are one of the best ways to build that confidence and trust. Think about it!

Doing things right is not always easy, but it is always right. Perfection may be out of reach; however, if we strive to learn true principles and apply them with integrity, we will be giving our best and earning the trust of those that matter most—a good way to go!

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It's time for me to focus on other things. Many hours and dollars have gone into my software and written materials over the last fourteen years. Now it's time to give back. This is not a gimmick. There is nothing to buy. I give it all to you for free. If you use the software and apply the principles, you can create a remarkable company. See Below. Have fun!

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Quotes about Business Systems

So, What Exactly is a Business System?

Video: "All Wealth is Based Upon Systems"

Michael Gerber, "E-Myth"

Michael Gerber

"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."

All wealth is based upon systems - 4 Big Ideas 1 Short Video

W. Edwards Deming, Total Quality Management

W. Edwards Deming

"If you can't describe what you are doing as a process, you don't know what you're doing. . . . 94% of all failure is a result of the system, not people."

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