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On business systems and business growth
Apr 30, 2017  |  Kenelm Tonkin



In a minute, I’ll reveal some new business systems I just introduced to my start-up. If you read carefully now, there’s a free lesson here on how to grow your business.

Business systems are a combination of:

  • Written instructions on the performance of tasks within a company, a job how-to book;
  • Policies and procedures which reinforce that how-to book;
  • Forms, templates and precedents in support of both the employees' performance and consistency for the company; and
  • Tools necessary for the performance of the tasks, such as the physical environment, computers, machinery, document storage, software, mobile devices and subscriptions.

Coupled with good people to follow them, business systems enable you to grow your business.

Hmmmm. Writing policies and drafting forms. You'd prefer bamboo under fingernail torture, right? I hear you.

The problem is, I also hear the countless stories of business owners failing to achieve the business growth they so desperately want. Typically, she is a sole proprietor or a one-man show. Perhaps he has a couple of helpers to handle the overflow work from customers. Maybe she has five staff including herself.

Can you sense the struggle? There are more tasks to perform than are possible in the ten hours he works each day. Mini-crises emerge during the day which distract from achieving daily goals. So, the printer might have a glitch, an employee might call in sick or an unexpected customer complaint might need to be handled.

It’s frustrating. Stress levels rise. The smallest irritant aggravates.

Days become weeks. Months fly by. Progress is thwarted and the business owner starts to feel like headway is insurmountable. A business anniversary confirms the enterprise is no further ahead than last year. Staffing numbers have cycled from one to five and back again. Now the founder is a little older, tired, less healthy and in need of a rest lest personal relationships be damaged.

This is a long-term disaster, far from entrepreneurial and sadly too familiar, right?


Fortunately, business growth is easier than you might think. However, the counterproductive cycle I just described has to be broken. A mind-shift is needed.

Here it is.

Most founders I know, not all but most, are motivated in part by control. They were independent thinkers as employees, free spirits in action and difficult to manage. So they resisted control from their boss. Now, as business owners, they are controlling. They seek to have their employees conform to their way of thinking just as their previous boss did.

Now, if control is a prime motivator for an owner, we might look at how control is exercised. It seems to me, there are two classic ways:

First, control is achieved by personal intervention. So, the founder is in the office, directing traffic, setting priorities, training staff, answering calls, running an interview in between a product launch and mediating a dispute between two staff. It’s all very hands-on. The owner’s active attention is required, usually a tight ship is run and the atmosphere reflects the owner’s energy level and mood as it exists from time to time.

Second, control is achieved through business systems with delegation and report back. So, all the same tasks are being performed. Staff are trained, calls answered, interviews are conducted, products are launched and disputes mediated. The tasks are performed by employees and employed managers according to documented business systems the operation of which they are all trained. The procedures establish key performance indicators with measurement against these standards, report back and review of actual performance. The owner’s occasional attention is required and margins are less per profit-center because employed managers must be paid in replacement of the owner. However, the owner’s active attention is not required so more profit-centers can be created.

Freelancer small businesses and owner-managers exercise control the first way and stay small. Entrepreneurs exercise control the second way and achieve business growth.

Who are you?

Wouldn’t it be amazing if you could, in a sense, make yourself redundant from your business? Imagine needing only to attend monthly board meetings for two hours whilst the rest of your time your employees and managers ran the business. Perhaps you might like to spend four hours a month working because you own two autonomous, employee-managed businesses. You do not need to be in the daily grind. Picture yourself uncoupled from the operations, leaving you free to deploy the profits as you see fit for personal consumption or investment, whether that be stocks, bonds, property, collectibles, alternatives or another private equity play .... another privately-held business in a now emerging portfolio group.

You can't grow your business if you're producing its product. Your business will be capped at the 16 hours you could possibly work in a day, and even that's not sustainable. You can’t achieve genuine, enduring, repeatable business growth unless you are free. Time. You have to carve-out the time.

Done well, you are actually trying to build an investible asset. It’s not a business tied to you. Rather, it’s a stand-alone asset that could be run by you or anyone who follows the business systems you devised. If this is achieved, then you have created an investment which can be sold.

Amongst the first questions would-be buyers of your company ask is, “Who manages this business?”, “How experienced and accomplished is your management team?” and “How many hours a week do you work in this business?” The prospective acquirer is assessing whether control is exercised by personal intervention, the first group, or by your business systems, the second. It's an important point when learning how to sell your business.



Now, 95% of business owners are the freelancer small business and owner-manager types. There are several reasons why only 5% are entrepreneurial:

  • Some cannot see the larger view of their behavioral loop. It’s like that movie Groundhog Day except the person has insufficient self-awareness of their recurrent pattern;
  • Others can see what’s happening but do not have mastery over the 14 Entrepreneurial Disciplines necessary to break the cycle;
  • More still simply discover, in their private moments as they realize they actually need to employ a manager to take over, that they are too risk-averse to even fund their replacement;
  • Yet others allow their egos to block their development, in that they fear a loss of identity or purpose were they to step away from the daily ebb and flow of the operation;
  • Others still lapse into the “can’t let go”, “perfectionist” and “if you want it done properly, do it yourself” traps. So they compulsively hold on to the minutiae, never letting go and choking off business growth as a result; and
  • Then some suffer the laziness or impatience problem. So, if you had a choice between building business systems, with all that entails such as mastering a role, documenting it in the form of a training program, devising reports, enumerating key performance indicators, recruiting a person to do the job and monitoring progress .... versus just doing the job, guess what .... it’s easier and faster just to do the job yourself.

Now, if you can avoid these common mistakes and move yourself from the 95% to the 5% elite, unimaginably positive developments will emerge. Your business systems will allow you to rest for a bit, regroup and then indulge a little in solid strategic thinking. The helter-skelter will come under control and the background noise fade so you can plan your next move. Work-life balance will return to you. You can enrich your personal relationships: more time for your spouse, your children, your family and friends. You will gradually discover more time for competitive intelligence and new business opportunities will flow to you. Your material needs will be satisfied but, much more importantly, your emotional and spiritual needs will be explored since, now finally, you have time. Your amazing, entrepreneurial life can be realized.



So, what is this magic elixir? How do you create business systems? How do you delegate and prosper? What should be included and how should they be operated?

There are several steps involved and it looks something like this:

Step 1: “Start with you”
Take a fresh sheet of paper and write a heading at center-top, “Owner.” This is your role. Let us assume that you are the original person in the business. Done. Easy. This takes 5 seconds!

Step 2: “Create the master list of tasks”
Business systems are about people who perform tasks consistently for a predictable result. So, you need to list all the tasks which need to be performed in order to make your business operate.

This is not as simple as it sounds. It’s easy to make a short list of the most time-consuming things you did today. However, if you truly want to grow your business, you need a list of tasks which is all-encompassing whether complex or modest. You want a future-proof list of tasks conceived as if your tiny operation is a conglomerate. So, you need to dream. You need to envisage your company with all sorts of specialist employees doing highly-skilled work. Yes, I know you can’t afford that right now but you need to map all possible activities of your future company. You don’t want to stay small, right? So you need to plan for business growth by at least sketching-out future employee tasks. Does your future corporation have an in-house public relations expert, lawyer, technologist or chief financial officer? Maybe you have an ambition to build a geographically-dispersed chain and will need a team of regional managers and a point-of-sale branding specialist. Think deeply about this exercise. It is not straight-forward. Be as detailed as your mind allows. The tasks you list need to be very detailed, and include task headers like “Preparation of annual business plans”, “Email client invoices” and “Replace bounced emails from a marketing campaign.” The list should be exhaustive. Delve into the minutiae. 

Step 3: “Clarify your experience”
Now you have a formidable list of tasks to be performed. Next, flag whichever of these tasks you have performed and already mastered. How you flag them is unimportant. Simply mark those tasks you know intimately and have mastered.

Now, sit-back and absorb what Steps 1 to 3 show you. Staring at you should be a frightening list of tasks, far too long for you to perform. It’s energy-sapping just looking at it, right? Do I need to remind you that there are just eight work hours in a day if you want a healthy life?

Step 4: “Map current employee task delegation”
If you have no employees, go straight to Step 5. 

If you have employees, take another fresh sheet of paper and write a heading with the role of one of your employees. Move those tasks the employee is performing from your Owner list to his list. If, amongst your employees, one of them performs a different role, take another fresh sheet of paper and list the relevant tasks under his job title. Remove those tasks from your Owner task list. Keep going until each of the current roles in your company has its own heading and task list.

Step 5: “Map current independent contractor task delegation”
If you have no independent contractors, go straight to Step 6.

If you do have independent contractors, take another fresh sheet of paper and write a heading with the role of one of them. Move whatever tasks the contractor performs for you from your Owner list to his list.

Step 6: “Organize reporting lines”
Arrange the roles into an organization chart of reporting lines as it currently is in your company. Most will have one role, Owner. Some might have five roles in a flat, two-layer structure all reporting to the Owner at the top. Yet another might have a more complex structure of five layers and dozens of roles. Whatever the structure, organize the roles into their reporting lines so that the existing organization chart emerges.

Step 7: “Pick or create role to master”
Choose an existing role to master or create a new role from Owner tasks which you reallocate.

Step 8: “Perform and master role”
Perform each of the tasks of this role over a timeframe you believe is necessary to master them. Some roles and the tasks allocated them will be uncomplicated and therefore take less time to perform and master.  Simple tasks may only require a minute, others may take months. Specialist tasks may take years to master or may be beyond you completely due to the expertise required. If the specialist tasks are beyond you, and here you might imagine keeping the books and advanced accounting journal entries, you might defer this completely to an expert for his feedback.

Step 9: “Fully document each task in a role”
Document each task of that role once mastered. If it is truly a specialist task which is beyond you, have the specialist document each task. Do not skimp on this. There are many ways your business systems can protect you from these blind spots in your knowledge.

Documenting each task involves writing and producing content as follows:

  • Task name;
  • Reason the task is performed, it's importance in context;
  • How the task is performed, a step-by-step guide;
  • Common mistakes in the performance of this task, how not to do it;
  • Who is allocated this task;
  • Timeframes and deadlines;
  • Key performance indicators;
  • Policies and procedures for the task;
  • Forms, templates and precedents for the task; and
  • Tools for the task.

Documentation may be written on paper like you are doing for this exercise. Perhaps you prefer to type, print and bind them into a booklet or file them in a loose-leaf binder for easy update. My strong preference, however, is an online training system with fields for the bullets above and a template repository, plus a feedback feature for continuous improvement suggestions. I have built such a system. Subscribe, then click here for this free tool. 

Step 10: “Write job specification and job advertisement for role”
Having performed, mastered and documented the role, you next work towards having someone fill it. So, you need to recruit and that means producing a job specification based on the tasks you've documented as well as writing a job advertisement with the pizzazz and sizzle necessary to attract qualified candidates. 

Step 11: “Fully document this Owner task”
In Step 9, you focused entirely on documenting each task for an employee role. You did it after you performed each task yourself.

Well, in this step, you go through the same process as in Step 9 but simply for documenting how you, as the Owner, write a job specification and job advertisement. You do this now, while the process is fresh in your mind and, in this way, are already creating business systems for the Owner or a future role to whom you'll delegate the task of writing job specifications and advertisements.

Step 12: “Research market rate for role”
A carefully crafted then well-advertised job will lead to the inevitable candidate question, "So, what is the pay for this role?" And, you'd better have the right answer, something competitive. So research is now required to find out the standard salary for this particular job. Look to as many sources as you can find: job ad sites, competitor employees in an informal chat, professional groups on social media, simple internet searches. Then decide whether you want to go just below or just above the average being offered.

Step 13: “Fully document this Owner task”
Again, see Step 9 and Step 11 but apply this to the Owner's task of researching market rate for a role.

Step 14: “Decide whether cash flow will support role”
OK. You know how much you will pay for this role. Can you afford it? This is a fraught question which really touches on the entrepreneur's risk-taking instinct. Often, the thought of any fixed cost increase to your business is ghastly. However, like a chess grandmaster, it is prudent to think a few moves ahead. What is the impact of not taking this risk? Is the danger of the status quo higher? Manage cash flow risk by putting a time limit on the new recruit to perform. If you have understood and accepted KPIs in place and have a clear expectation from the candidate the timeframe you expect results, failure to achieve them will lead to a termination trigger. If your employment contract has a standard no-risk trial period, no problem. You've lost only one to three month's salary.

Step 15: “Fully document this Owner task”
Again, see Step 9, Step 11 and Step 13, but apply this to the Owner's task of deciding whether cash flow will support a role.

Step 16: “Recruit, train and delegate role”
Once all tasks for a role have been performed, mastered and documented, recruit a person to perform this role. Train the employee to perform this role exactly as documented. In training, emphasize key performance indicators, as well as frequency and form of report back. I touched on this in communication can fill the void. Stay close to the recruit for an agreed period of settling in and gradual devolution. Offer access as a lifeline but slowly reduce access over the agreed period until the recruit is self-sufficient and producing to key performance indicator level.

Step 17: “Fully document this Owner task”
Again, see Step 9, Step 11, Step 13 and Step 15 but apply it to the Owner's task of recruiting, training and delegating to a role.

Each time an Owner’s task is documented, you will flag it to indicate you have direct experience performing it. So, your role of Owner is also being documented insofar as it dovetails with the delegation to other roles in your company.

Step 18: “Access impact of employed role on business”
Here, you sit back for a little while and watch how this devolution of responsibilities is affecting your enterprise. This is largely about key performance indicator management and analyzing gains unleashed because you are now more free to pursue higher-value activities. Did you sign a lucrative deal because you are now not bogged-down in the trenches? Did that deal surpass the cost of the recruit’s salary? Or did the recruit save you significant money, potentially more than the cost of his salary? Perhaps, being uncoupled from the specific tasks you’ve thus far devolved means more product volume can be created or even a brand- new profit-center created? What is the bottom-line impact of these advances? Is it more than the cost of a mere salary?

Admittedly, this is part art and science. You can review hard numbers to be sure. However, projecting future impacts can be subjective. Intuition will be required.

Step 19: “Decide whether to continue delegation of tasks”
Now, based on all the factors you have before you, make a decision. Should you continue? Do you sense that bottlenecks are being released and that your business is starting to hum? Make the call. Decide your next step, to continue devolving or wait.

Step 20: “Repeat Step 7 to Step 19 for next role, or until you are left with only Governance tasks”
If you continue, choose another role to master, document and fill. Repeat the process until each and every role is properly designed.



This all takes time because you have a huge list of tasks to perform in addition to all this business-building work. Therefore, creating business systems for the first role is the hardest. As you gradually move through your operation, one role at a time, you will start to feel the process becoming easier because you’ve delegated more tasks. The pressure on your time slowly alleviates and that feeling of control emerges rather than continual melee.

The process has an end, of course. Though seemingly never-ending, your list of tasks as Owner is not infinite. With every sweep across your diminishing list of tasks with one delegation after another, you will notice a few tasks that just keep staring at you. The delegation of these tasks may well vex because your instinct is warning you that there is a line in the delegate sand.

If you start to feel like this, you are probably staring at governance tasks which I say includes:

  • Recruit, train, delegate, manage, discipline and terminate the chief financial officer;
  • Engage an external auditor to uncover misappropriations and fraud;
  • Conduct a detailed quarterly investment review and instruct the treasury function;
  • Recruit, train, delegate, manage, discipline and terminate the chief executive officer;
  • Conduct a detailed quarterly operations audit to uncover variance from business systems;
  • Review board papers before circulation; and
  • Chair monthly board meetings.

Some will argue that the chief executive can recruit, train, delegate, manage, discipline and terminate the chief financial officer. Others might suggest that you are still meddling if operations audits are conducted every twelve weeks and that specialist investment managers can handle capital deployment.

I would agree that the logical extension of devolving your tasks is that you attend only one annual shareholders meeting as the Owner. However, in my view, this is a dream and I do not know any privately-held company proprietor with a majority stake who does this. For all the talk about working on the business not in the business, I know from direct and difficult experience that the entrepreneur must retain governance tasks. For me, this means retaining operational and financial levers through the CEO and CFO, control of where the profits go and periodic reviews to keep everyone honest. Too much hard work has occurred to let it go completely.

I believe governance tasks may take 4 hours per week at the most. Of course, if that is too much for you, there is another way to perfect freedom, and that is to sell your business!



Now, these 19 steps to creating business systems for business growth are the theory. Let’s peer in the window to glimpse how it works in practice. I promised you a real-world example crossing my desk currently. Let me share it with you now.

I’m working on a fantastic start-up. It offers a seriously innovative product and service delivered by genuinely talented people. So, the focus has been product and assembling a team.

We’re at the promotional stage now and, with it came my choice. Should I save money and do the promotion myself which I know would be executed extremely well given my decades of marketing and sales experience. Alternatively, should I create business systems and delegate this work?

That’s the same as asking, “Do I want to be a salesman with a CEO job title or a CEO with a sales team?” Put another way, the choice before me was to be an owner-manager chocking his business or an entrepreneur.

I chose entrepreneur.

Here’s how:

Applying Step 7: “Pick or create role to master”
In the sales function, lead sourcing, qualifying and closing sat on my ledger as Owner. I was finding it too time-consuming given all the other tasks I had to perform to do lead qualifying. I could handle lead sourcing by purchasing a highly-targeted list. I figured lead closing would not be a large time commitment, perhaps one call per day. So, I created a role called Sales Executive, the tasks of which focused primarily on qualifying leads over the phone in an outbound, cold calling process. 

This step took 2 days to mull over.

Step 8: “Perform and master role”
I then performed the relevant tasks, appreciated a few others which I had not envisaged. Whether I mastered the role, I cannot say with confidence. I am a tough self-critic so will say I did my best under the significant time constraints. 

This step took 2 months, and that is really skimping a bit, too short.

Step 9: “Fully document each task in a role”
Given this experience, I documented it in a software system I’ve developed which records this business systems process, including stating that the key performance indicators for the role would be:

  • 40 Calls per day;
  • 1 Qualified lead per day; and
  • 1 Sales meeting per day.

This step took 5 days to complete.

Step 10: “Write job specification and job advertisement for role”
I did this modelling off templates for other roles I had already written. These were stored in my software repository. Once written, I uploaded them to the system.

This step took 6 hours, plus interruptions.

Step 11: “Fully document this Owner task”
I have written job specs and ads many times before, so have already fully documented the task. However, the job specification and job advertisement were new for this role so Step 10 included creating and uploading these resources to my task delegation system. Notice, because I am well into the process of systemizing my company, I didn’t need to do the entire step on this occasion. 

To create the template resources, this step took 30 minutes.

Step 12: “Research market rate for role”
This took about two hours to perform as I’ve done it many times in my entrepreneurial career. I look at job advertisement sites, read LinkedIn group discussion threads and make a few strategic calls for comparable salary rates. That’s it.

This step took 2 hours.

Step 13: “Fully document this Owner task”
Consequently, I didn’t have to do this step as I’ve done it for past roles I’ve delegated.

This step took 0 seconds, but might originally have taken 3 hours.

Step 14: “Decide whether cash flow will support role”
This was as simple as looking at the company bank balance and estimating how many month’s salary I might incur with a recruit before terminating if the effort was unsuccessful. I decided the possible gain was worth the possible loss of cash.

This step took 30 minutes.

Step 15: “Fully document this Owner task”
I’ve made this decision countless times before so Step 15 was well and truly done.

This step took 0 seconds, but might originally have taken 4 hours.

Step 16: “Recruit, train and delegate role”
Not wanting to have all my eggs in one basket, I took a three-pronged approach to recruiting my Sales Executive: LinkedIn using advanced search, the job ad site, and a lead generation supplier. In the end, I found that LinkedIn was very good at fine-tuning professional backgrounds and I was lucky to find a person who happened to be in the market and who mentored one of my managers. Though I tried to target, I received many unqualified applicants which wasted my time and money. Though a little more expensive, the lead generation company offered a back-up plan. I obtained this option on referral.

Training was via my system. After all, I had every Sales Executive task documented.

Delegation was gradual over the first week. 

This step took 3 days of intensity, but perhaps 6 overall once the gradual devolving of responsibility is included.

Step 17: “Fully document this Owner task”
I have recruited, training and delegates countless times and this was already documented for me.

This step took 0 seconds, but originally could have taken 5 days to document because these are universal human resources tasks of any manager and I put a lot of effort into them.

Step 18: “Access impact of employed role on business”
I received a new client within 8 weeks equal to the salary for those weeks. The client signed a one year contract, so the remaining 44 weeks were profitable for the company. Having created the business systems necessary to grow my business, it is easy to add new Sales Executives. Were results to be replicated, business growth would be exponential.

This step took 30 minutes.

Step 19: “Decide whether to continue delegation of tasks”
Now, since the Sales Executive role is critical to my business, I decided to pause delegation of tasks for other roles until I had built a team of Sales Executives. I wanted to build a war chest before further functional expansion and devolution. In short, I am happy to use the business systems I have already created to build a financial buffer zone. When that is achieved, I will move to Step 6 on the next role. I expect that to be in about 6 to 10 weeks.

This step took 2 hours, off and on when all time is considered.

You can see that the entire process represented more than 3 months of my time, though in this instance it was less only because I reused part of the business systems. The exciting result of this all is that, now created, I can move from one Sales Executive to one hundred seamlessly. Business growth is now possible because I’ve uncoupled myself from the operation. I am not needed for lead qualifying work.



So, here’s a tough question which should focus the mind. From which tasks and roles in your business can you uncouple yourself? From which parts of your company do you wish to make yourself redundant?

The benefits are enormous. If you are struggling with work-life balance and want more time for your spouse, your children, your family, your friends, for life experience, if you want to achieve that whilst still owning a vibrant, profitable business, if you want more of that precious commodity, time, then I strongly recommend the path I have outlined here.

Start with modest steps, but do start. I am dying to know how you go and how you overcame the inevitable hiccups along the way. Email me with the results, your time dividend and real dollar benefit to your company.

Then, inspired, let’s share your business growth success story.


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