Six reasons why small business should invest in systems and processes

14 July 2020

Rebecca White, Director of Financial Education |

As a business owner, you probably started as a solopreneur or with a small team. When the business was in the startup phase, everybody knew how things were done. As you grow, explaining how things work (often repeatedly) becomes time-consuming and more complex. Without adequate systems and processes in place, a small business owner could be putting everything they have built at risk.

Why do you need to document your processes?

Many small business owners prefer to think of their business as lean, agile and flexible. There is often not enough time to document systems and process. However, formally capturing how your business transacts has multiple benefits, including saving you time and money while allowing you to do more valuable tasks. Staff can get more done without you, people make fewer mistakes, and you become more attractive to potential buyers.

Let’s review six reasons why investing in business systems makes good financial sense.

Reason #1 – Maximise your potential 

As a business owner, there’s only one of you. Being able to leverage your time, skills, and knowledge is a crucial part of growing a business, so it pays to be smart about where you spend your valuable time. The way to do this is to build a business that can run without you, with daily tasks and processes delegated to key staff members to complete to agreed standards.

Reason #2 – Increase your business value

Many factors contribute to the value of a business, including having well-documented systems and processes. The key to consistency is accurately documented systems and procedures that cover common tasks. The easier it is for a potential buyer to step in and operate the business without you, the more attractive to investors the business becomes.

Reason #3 – Improve your efficiency

When everyone follows a well-tested set of steps, you reduce the likelihood of mistakes, delays and duplicated effort. Even the process of documenting the process is an opportunity to make improvements.

Are bottlenecks slowing you down? Is there a faster, easier, less costly way to perform routine tasks? Could new apps or software eliminate manual steps? Regular reviews of systems and processes are essential to improving your efficiency over time.

Reason #4 – Be ready for growth

It’s a mistake to think formal procedures are counterintuitive to flexibility and growth. In fact, the opposite is true. When you have documented processes, you are more likely to see opportunities to adapt and feel more empowered about making decisions to enable rapid growth. Having good systems and processes will also make it easier to obtain funding from lenders.

Reason #5 – Be more attractive to investors

How you record and operate your systems and processes provides vital insights for investors. A business with in-depth and well-documented procedures speaks the language of efficiency and compliance.

Even if sale or expansion isn’t part of your current business strategy, you never know when the opportunity might arise. Ensuring your business is sale and investor-ready at all times is a smart strategy enabling you to take advantage of approaches if you are the target of someone else’s expansion plans.

Reason #6 – Comply with the law

Having formal and documented processes takes on added significance when you must comply with safety or legal obligations required by your industry body or government regulator. The more detail you include in flow charts, diagrams or checklists, the less likely errors will occur, and the more confident team members are with legal compliance.

Ready to learn more?

Our 12-month Business Growth Program includes a detailed module on Operational Efficiencies. In this workshop, we review existing systems and processes for inefficiencies and consider what technology solutions will help streamline your business.

To find out more about the program, download our 12-month Business Growth Program curriculum.