Growth feels great… right up until it doesn’t. Many owners strive for increased sales, more customers and greater stock levels. One Monday morning they open their eyes and realize the business has got a life of its own. Running them, not the business. Orders are forgotten. Stock disappears. No-one can locate the paperwork. In this article, we will discuss building systems for your company that support long-term business growth.
Here’s the problem:
Business growth doesn’t break a business. Weak systems do.
A system is simply a repeatable method for accomplishing something — the same method, each and every time — whether the owner is in the building or on a beach vacation. Financial systems. Inventory systems. Human systems. Real Estate systems.
Those stats prove it. Research from LendingTree analyzing federal data discovered that 22.1% close within a year. That’s approximately 600 businesses closing each day. They didn’t fail because they ran out of customers. They ran out of cash.
The good news?
Systems are constructed incrementally with existing tools and predetermined budgets.
Here’s how to do it…
What you’ll pick up:
- Why Growing Businesses Run Out Of Room
- The Four Systems That Hold A Business Together
- Where A Long-Term Storage Rental Fits In
- How To Build Systems That Actually Stick
Why Growing Businesses Run Out Of Room
Every scaling business eventually reaches a bottleneck. It’s rarely sales, and rarely staff…
It’s space.
Overflowing shelves in the hallway. Seasonal merchandise housed in the back of a truck. Boxes of outdated inventory taking over what was once a conference room. The business isn’t doing anything wrong. It has just outgrown its physical space.
Signing a lease for more commercial space is the obvious solution, but it’s also the costly one. Industrial space in the US averages $10.18 per square foot annually, before utilities, fit-out fees and annual rent escalations are added on.
That’s why some business owners rely on a long-term storage rental as their overflow space instead. A 300 square foot storage unit provides growing companies with a permanent place to store pallets, spare inventory, tools, equipment and archived files — without committing to a multi-year commercial lease. Monthly payments, keep for years, and expand or contract with the ebb and flow of your business. Long-term storage rentals cost most small businesses a fraction of what extra commercial space does, and can be set up in about 10 minutes.
Pretty simple, right?
The Four Systems That Hold A Business Together for Business Growth
Every business that lasts is built on four systems.
Learn to get these fundamentals right and growth becomes mundane. Mundane is good. Mundane equals predictable, and predictable is how you feed your family five years down the road.
Money Systems
Cash is the fuel. Without it, nothing else on this list matters.
A money system answers three questions at any moment:
- What came in?
- What went out?
- What’s left?
That translates into weekly bookkeeping, invoices delivered the day work is completed, and a separate account where your tax dollars are dumped. None of that is rocket science. If an owner can’t answer those three questions, they are just guessing. Guessing winds up costing you dearly.
Stock & Space Systems
Everything must go somewhere, and somewhere must have an inventory.
Whether that home is a shop floor, a garage or a storage rental facility across town. If it takes more than 60 seconds to access something then you have a flawed system.
Easy wins here:
- Label every box, shelf and bay
- Keep one shared inventory sheet that everybody updates
- Count stock on the same day each month
- Move slow-moving and seasonal items off-site
A company that knows precisely what it owns purchases less, wastes less and quotes more quickly.
People Systems
Many owners contain the business within their own head. This is great… up until it becomes your ceiling.
The solution is documentation. If a task is performed more than twice there should be a concise checklist written in plain English describing how to do the task. Training someone new becomes passing off the checklist rather than teaching the same lesson for the 11th time.
This is also how you build a business that becomes sellable someday. Buyers don’t buy systems, they buy a founder who sits behind a desk nonstop.
Customer Systems
Winning a customer is hard work. Keeping one is cheap.
A customer system is nothing more than a documented process for after the sale. Who calls, when they call, and what to say. Include a reminder to ask satisfied customers for a review and watch your business begin to feed itself.
Where A Long-Term Storage Rental Fits Into The Plan
Space is the system most owners forget until it’s already a problem.
Here’s what that looks like in practice:
- Seasonal stock: Purchase items when prices are cheap, store them until demand rises and sell when prices peak. Increased margins, no panic buying.
- Records and equipment: Files, tools and display equipment are kept dry, safe and out of your work area.
- Ability to trade up: If your business is doing well, you can always move to a larger unit next month instead of renegotiating.
The advantage is one predictable monthly fee. When you rent storage long term you take a cluttered space issue and reduce it to one line item on your budget. That’s what a system should do.
How To Build Systems That Actually Stick for Business Growth
No one builds four systems in a weekend. Owners pull that stunt and wind up with nothing.
Do it in this order instead:
- Pick the one thing that goes wrong most often
- Write down how it should be done, in plain language
- Test it for two weeks and fix what breaks
- Hand it to somebody else and let them run it
- Move on to the next problem
Do that twelve times. One system per month equals twelve systems per year. Twelve systems means an entirely different enterprise.
One caveat: If no one adheres to your system, it’s merely a document. Concise. Visible. Review quarterly.
Tying The Whole Thing Together for Business Growth
Scaling is not working harder. Scaling is creating a business that runs smoothly as it expands.
To quickly recap:
- Weak systems break growing businesses, not weak sales
- Money, stock, people and customers each need a written process
- Space is a system too, and a long-term storage rental solves it cheaply
- Build one system at a time and review it every quarter
Start with the biggest mess that annoys everyone the most. Completely clean up that one, rinse and repeat. Do this for a year and the store will run itself without the owner in the room.
