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What are business systems & 5 reasons why they are critical for any business owner

May 25, 20225 min read

In this article, I discuss what business systems are and why they are critical to any business owner who wants to achieve business objectives faster.

Business systems are used by high-growth businesses to successfully create a sustainable business

Many entrepreneurs start their businesses hoping that they will bring them more freedom. However, the reality of running a business is often the opposite.

Being a small business owner usually means that you need to wear all the hats – from customer service and accounting to sales and copy writing.

As your company grows, so does the number of things on your plate. What once felt empowering can start to feel overwhelming. You’ll spend more and more time stressing about all the things you should do and what you might be forgetting.

But luckily there is a solution: Building systems for your business!

Business systems are the secret to how some entrepreneurs are able to achieve business outcomes sustainably, while others hit the wall and burn themselves out.

What are business systems?

Definition: Business system

There are many definitions of a business system.

My favorite one is by Michael Trezza: “A business system is a group of interacting, interrelated, or interdependent elements organized to meet a particular set of business objectives.”

4 elements of business systems

Business systems consist of 4 key elements: tasks & resources, processes, people, and tools. All these elements need to be in place for a business system to work.

Tasks & resources

Tasks and resources are the actions and information that are managed and coordinated in the business system.

Tasks are what need to be done in order to achieve the goal outcomes of business system and resources are the information, documents, and or other information needed to conduct a task or business process.

Example: For a recruiting system, a task could be interviewing a candidate, and a resource could be a list of interview questions.

Processes

Processes are sequences of actions or steps that are completed to achieve a certain end result.

Essentially, they are the recipes for how tasks need to be completed and resources managed in any predefined context.

Example: For a recruiting system, a process could be the steps that a candidate goes through as they go through from applying for a role to being hired for the job.

People

People are usually the ones completing the tasks and operating the business system.

You need to make sure your business systems are properly designed to support how your team members work and that your team is appropriately trained and equipped to use them.

Example: For a recruiting system, people would be those who are managing the recruiting process.

Tools

Finally, tools are a critical element of an effective business system.

Tools are the software, platforms, and apps that you use to manage your system. They can be used to organize and manage the tasks and resources, document and track processes, and help the people in your team collaborate.

There is a multitude of specialized tools for building management systems for specific uses.

As a simple and centralized alternative, most of the popular work management tools, such as Notion, ClickUp, Asana, and Trello can be also used to build systems to manage a variety of business activities.

Example: For a HR management system, a tool could be Personio (specialized in human resources information management) or an HR management dashboard built on top of Notion (work management tool).

Benefits of business systems for business owners

Less stress, more freedom

Business systems allow you to manage everything across business functions in a streamlined and organized way. This reduces your overwhelm and stress as a business owner and saves your valuable time for high-value activities, such as strategic planning.

You can finally have peace of mind knowing that everything is under control.

Better delegation

There are many reasons why business systems improve delegation.

First, having defined your business processes makes it easy to delegate them to your team.

Second, having all the information and resources related to those tasks clearly organized in your system allows your team to easily find what they need.

Improved consistency

By having a system in place, you are ensuring that everyone in your team runs your business processes in the same way. As a result, there should be more consistency in your business activities, which in turn leads to better quality and client satisfaction.

More efficiency

Business systems help streamline the processes and save time, which results in improved efficiency for your business. Systems can also be used to automate some workflows, which results in less work for you and your team.

Improved efficiency also means your team is able to achieve goals faster and reduce costs.

Faster growth

All the benefits I’ve listed above increase your business’ productivity, which means you can serve more customers and make more money.

With this in mind, it’s easy to see how your business system investments will make your business scalable and sustainable, allowing you to grow your business faster while minimizing overwhelm

To recap

Implementing business systems is essential for running efficient business operations. Creating sound business systems allows business owners to grow successfully and sustainably while minimizing overwhelm.

A business system is a group of interacting, interrelated, or interdependent elements organized to meet a particular set of business objectives.

The 4 key elements of business systems are tasks & resources, processes, people, and tools.

The benefits of business systems include reduced stress, better delegation, improved consistency, more efficiency, and faster growth.

(Psst… one example of a system that every business owner needs is goal setting. I’ve earlier written another article on how to use the OKR method for goal setting. You can find it here: 

Set Goals that Drive Business Success – OKRs & Strategic Goal Setting for Entrepreneurs [Updated 2023]

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Taina Pereenniemi

Taina Pereenniemi specializes in helping coaches and consultants build simple and scalable businesses with custom strategy & done-for-you systems using my proven 4S Method. She has helped over 50 entrepreneurs with their business systems and/or strategy, and previously built a world-leading consulting business around Notion. Equipped with a Masters Degree in business strategy and 10+ years of strategy and 6+ years digital business experience - Taina's not your typical self-taught "follow-me" business coach. When she's not strategizing and streamlining workflows, you can find Taina playing with her two small kids or practicing yoga.

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