Startup businesses advance by developing, enhancing and maintaining operational systems to support the execution of the activities of the business. This frees creative human minds to focus on far more valuable innovations and problem solving activities. Investing time and capital to develop automated systems and process and perhaps even outsourced functions to third parties creates a growth engine for the company.
Systems allow the business to take on more work and process it efficiently with marginal incremental costs. As you develop your business, you determine strategies for product development, manufacturing, service delivery, logistics, marketing, distribution and many more. In addition, consider systems for administrative and financial management, human resource management, regulatory compliance and reporting.
Relying too heavily on people to conduct most of the work in your business, you are likely to discover cost of that approach. Hiring individuals can be costly and time consuming. People have limited time capacity so the incremental investment is higher. People need training; they are more prone to errors and they tend to need time off frequently. People are typically the highest expense item on most income statements. Well-designed operating systems can defer much of this expense while providing an efficient growth platform.
This does not mean to suggest that you never hire people in your business. People must run businesses and successful business relationships depend on the people who establish them. People can ingeniously solve problems, invent new products, serve and support customers and generally improve the operation of your business in ways that automated systems cannot. The emphasis here is on repetitive work performed reliably, accurately, and in high volume without requiring intervention to the processes themselves.
A system does not have to be a computerized business process. A simple “How To” handbook on essential tasks around the office saves people time and assures consistency. It also allows new team members to follow the correct procedures from the start. Such manuals or guides should change as the business evolves and processes develop and grow. As certain work categories become repetitious and require processing of large volumes of work, computer automation becomes essential.
Industry associations or standards bodies may have produced industry standard best practices for your area of business. Adopting relevant standards can significantly enhance your operation by streamlining processes to enhance your ability to relate to suppliers, partners, and customers. Many such standards are developed on the experience and knowledge of large corporations with years of experience and large teams of engineers.
Another important area where systems are helpful is in the area of regulatory compliance. Systems provide standardized methods for complying with regulations to protect your company from liability from violations or questionable practices. Some areas, like accounting, are essentially the same across all businesses, whereas security and privacy and government reporting may be more specific to an industry. Seek advice of legal, accounting, and IT experts in the pertinent regulatory area.
Start the business with a bias toward understanding the work that may be managed more effectively by a system. Perform an assessment before you hire a new person to be sure that a system could not handle the work better. This may not eliminate the need to hire someone, but it will make the business more productive. As the business grows, this attitude will produce significant returns as more work is performed efficiently by systems you established along the way.