Menu Close

What is a Business System?

A business system for all key processes is necessary for every modern business. But what exactly are they? And why do you need them?

A business system is process where a group of interacting people or mechanisms within a business act according to a set of predetermined tasks to achieve a desired outcome.

Because a business system relies on an outlined process, it produces a predictable outcome.

Business systems are summarised well and were made more common by Michael Gerber’s 1986 book The E Myth, although of course they have always been a part of businesses in one way or another.

Making your business predictable

Because business systems produce predictable outcomes, they allow the business owner to automate their business and make business plans according to the predicted outcomes set out by their business systems.

For example, a sales business system may produce a predictable revenue of sales, which allows a business owner to make a cash flow budget based on that revenue figure.

By creating systems in your business, you allow yourself to create a business plan, which is crucial for every business.

Creating job roles, not one person doing everything

Clear job roles where every role is working as part of the well oiled machine of the business is critical for success.

In an ideal business, business systems should run the business, and people should be running those systems. Job roles outline what the tasks required for those systems are, so that a person can clearly understand how their work contributes to the overall success of the business.

Far too often in a business, some people carry more weight than others.

One of the causes of this issue can be job roles not being clearly defined.

If job roles are clearly defined, then it is clear where one person’s job starts, and another person’s job ends. That means that if two team members correctly follow the job roles system of the business, it is clear who is doing their job correctly and who is not.

Business systems give you clear insights

Because your processes and systems will be documents with business systems, you will be able to see clearly what is working and what isn’t.

In the example above regarding job roles, a clear job roles system will tell you which team members are performing their roles correctly.

Another example is a good debtors systems so you can get paid faster, which you can read more about in our article here.

Further, good cash flow management systems will allow you to predict your cash flow and make informed business decisions based on real insights into what is wording, and what isn’t.

If you would like help setting up systems in your business, get in touch with us below.

I’m interested in business help

Related Posts