5 Business Systems to Set Up Now

Systems are critical to your business success. While you might get along for a little while just taking care of business tasks on the fly, soon enough you’ll find yourself frazzled and frustrated. A systems approach helps. Here are five business systems to set up now.

Marketing System

If you don’t have a marketing system, you won’t have a consistent and predictable workflow and revenue stream. The lack of a marketing system is a common mistake made by many small businesses and solo entrepreneurs.

If you’re a freelancer, you depend on word-of-mouth for most of your marketing. You may think that there’s no way to actually systematize word-of-mouth, but that’s just not true.

Not only can you create a marketing system around word-of-mouth, but you can do so inexpensively. In fact, I would recommend that any small business should start their marketing system with word-of-mouth, expanding to other forms of marketing as needed.

Start doing one of these today

Here are a few things you can do to improve word-of-mouth:

• Make sure your business cards or other promotional materials, no matter how minimal, contain not only all possible ways of reaching you, but also why somebody would want to reach you. This means including your positioning statement, or some meme that immediately communicates why you’re different and worth talking to.
• For an affordable amount of money you can order small, brightly colored, and clever cards from either Moo.com or Zazzle.com. Include something unpredictable, funny, or informational on one side of the card and your contact info on the other.
• Create a simple way to encourage and reward your clients for sending business your way. Communicate this system to your clients on your website, referral cards, signs, invoices, or on any other communication medium you employ.
• When word-of-mouth marketing succeeds, it’s because there’s something unique about you and your message, in my opinion. Therefore, you really need to focus on your positioning statement. Don’t just be a web designer, be a web designer for veterinarians, be a web designer who specializes in shopping cart systems, be a web designer who only uses monochrome themes.

Go prefab!

Get a prefab marketing system and start using it. For solo entrepreneurs, I like C.J. Hayden’s Get Clients Now! system. It’s simple, direct, and effective. For information about how to create repeatable systems in your business, read Michael Gerber’s The E-Myth or read through his site for more information.

Sales and Proposal System

Sales and proposals are areas where freelancers and solo entrepreneurs often drop the ball. It’s understandable, given our cultural stereotypes and real experiences with sleazy salesmen, that many of us view selling with about as much enthusiasm as jumping into a vat of raw sewage.

But, selling is a fundamental process in every business. You may have been lucky in getting into a business where you already had a number of contacts, and selling has been irrelevant. If you want to build your business, though, you’re going to need to implement a sales system that allows you to focus on the parts of your business you do best.

A sales and proposal system, done properly, puts 90% of your process on auto-pilot and frees you from the annoyance of having to sell.

Selling is really nothing more than communicating benefits to people who need what you have to offer. Again, once you’ve really nailed your positioning and your market, creating a unique selling proposition should be a snap.

Don’t sell, consult

If you can forget about selling and focus on consulting, solving problems, and collaborating with your prospects and clients, you’ll have no trouble getting more business.

The proposal is the critical tool in establishing your credibility as an expert and promoting yourself as an advisor to clients. In short, the proposal reflects your research into the customer’s needs, communicates both the problem and solution to the prospect or client in a way that they can understand, agree with, and expand on, if necessary, and serves as the project agreement between you and the client.

Use the proposal as a daily plan

Everything about a project should be in that proposal. It’s both a guide and a contract. The beauty is that you can create a boilerplate proposal that you use as a basis for all projects. Also, the proposal becomes the focus of your sales and consulting efforts.

Yes, you end up doing more work up front. But that up-front effort will simplify the actual project work. And, in some cases, doing the proposal helps you identify issues you might otherwise have missed, allows you to boost your price, change the scope of the project, or simply decline the project.

For an example of a simple proposal, check out my post Create Effective Project Proposals.

Work Production and Review System

This is the part most people get right, or at least partially right. If you’re a freelancer or you run a small business, it’s likely you got started because you really enjoy doing the work.

However, unless you’ve been employed by a highly-organized company doing the same kind of work, you may be used to performing in a haphazard manner. That’s OK when you only have one job at a time. But an unorganized approach to project management can be overwhelming once you begin taking on parallel projects.

Part one of a work production and review system is about your methods and approach to the work. Part two involves communicating with the client during the process, to avoid making false assumptions. False assumptions often lead to misunderstandings and leave you open to lots of rework. That’s obviously something you want to avoid.

Craft a detailed workflow process

Imagine that you suddenly need to visit an ailing friend for a week. You’ve got a critical project that must be completed so you decide to hire a contractor to finish it for you. How are you going to lay out the process for somebody else to follow?

Analyze your working process and write down each major step. For example, if you’re a copywriter, you might run a project like this:

1. Create client file and project file.
2. Review client’s web content and marketing collateral for voice, complexity, etc. Print out, mark up, highlight, file.
3. Interview client via email and/or phone about 6 major points to be covered in content. Transcribe and file.
4. Review client competitor websites, including number 1 player in market, if not my client. Print and highlight, file.
5. Research client business, service, or product to gain more in-depth knowledge, keeping notes in Google Notebook. Print, highlight, file.
6. Compile notes into one single document, review, file.
7. Brainstorm, coming up with at least 50 ideas and/or approaches.
8. Narrow down to 3 main approaches/concepts, prioritize, document.
9. Review with client.
10. Write draft of chosen approach/concept.
11. Review with client.
12. If approved, write and revise drafts. If not, either revise or write draft of one of the other concepts.
13. Submit final to client.

You should be able to flowchart this process and post the document so that anybody who sees it could follow it reasonably well.

Sign painter employs a tactile and physical system

Steve Hosmer of Stokes Signs in Santa Cruz, California, has an incredibly simple, but effective project traffic system. In his offices, one large wall is covered with a metal sheet.

Using colored tapes, Hosmer has marked out process steps in columns on the wall. He inserts each client’s project plan and various designs, material samples, and reference documents into a large plastic bag. As he and his team move through the project, they add any pertinent materials to the bag, and they attach the bag to the appropriate project column along the wall, using magnets.

This system affords the team a quick visual cue and allows them to see if they are getting bunched up in one process or another.

Is there something like this you could create for your business?

Billing and Collections System

If you plan on making money, this is a critical system to put into place. Not only does it include the ability to quickly generate an invoice and send it to your client, but it includes a system for following up with clients to make sure they pay.

Nobody likes to be a nag

Yes, it is really annoying to be put into the position of having to nag, but that’s a reality of being in business for yourself.

Want to simplify that process?

• If you present finished products to customers in person, always present your invoice at the same time.
• Send an invoice on the same day that you complete a project.
• If you have established terms with a client, such as Net 30, don’t wait until 30 days have gone by to call them. Call them after 20 days and politely ask them if they received the invoice, if it was clear and correct, and if they plan to pay you within the next 10 days.
• Better yet, if you can get away with it, set up different types of terms. For example, in your proposal, include a term sheet that says you require a 30%-50% deposit before you start the job. The remainder is due on completion of the project. That way, you’ll cover your overhead, quickly eliminate the few deadbeats who have no intention of paying you, and commit the client to the project.
• Establish a professional and equal relationship with the client, right up front. By putting everything down in writing, including your processes, you preempt patronizing or condescending behavior by clients. This move is especially important if you are significantly younger than many of your clients. One way that jerks justify stringing you along for payment is by telling themselves and others that you’re just a kid, or you don’t have a lot of experience, you didn’t follow through fast enough, and so on. By laying everything out in detail, you eliminate most of that nonsense.

Get an online invoicing system

You need an invoicing system that allows you to send invoices quickly, track those invoices, and follow up on payments. Try one of the online systems I describe in my earlier post Best Online Invoicing Applications.

Accounting and Tax System

Accounting and taxes are the two areas that keep many of us awake at nights. This is an area that I happen to dislike above all others in business. It’s not that I don’t care about the numbers, but I just don’t find keeping track of numbers very much fun.

Automate as much as you can

That’s why it’s important to implement a system, and one that is easy to use, easy to understand, and easy to organize along a timeline. What I mean by this is that you need to create or use a system that allows you to enter accounting data on a timely, regular basis, but at an interval that isn’t overwhelming.

One of the best suggestions I’ve ever read, heard, and made is to contract with a freelance bookkeeper, who can help you organize your paperwork and set up a system that will cause you a minimum of pain.

For most small business owners, including freelancers and solo entrepreneurs, you need to keep track of a few fundamentals:

• Expenses
• Income
• Taxes

Seems so simple when I put it like that, doesn’t it?

Old-fashioned methods work too

You need a way to keep track of your expenses (many people use a checkbook or journal) and all of those little bits of paper. I created a simple form that consists of a table with spaces for:

• The date I bought the item
• The company I bought the item from.
• Item description
• Cost
• How I paid for the item
• Project the item was for, if applicable

The form is on a whole sheet or half sheet of paper. I staple one receipt to each form, and organize them at the end of each day. That way, I don’t lose receipts and I’m able to remember all of the details. Doing this, you can hand a stack of receipt forms to your bookkeeper once a week, or once a month.

Most bookkeepers and accountants will ask you to implement a system similar to what they’re using, often Intuit’s QuickBooks. That’s fine, but you’ll want to use a bookkeeper who can explain how to use the software, or you’ll need to take a class.

No matter how you set it up, aim for the ideal situation: for me that means being able to spend my time elsewhere when April 15th rolls around. Like this:

As for taxes, if you’re making any money at all, you’ll need to start paying quarterly estimated taxes. I suggest that you talk to a bank manager at your bank about how to set up a special account for the money. And, if you haven’t already, you’ll need to set up a business checking account that’s separate from your personal account. Sharing money between accounts is known as co-mingling and it’s definitely something to avoid.

Conclusion

You’ll use all five of these systems throughout the business cycle, some more than others during different parts of the cycle. Your business consists of repeatable patterns in marketing, sales, production, billing, and accounting. In general, they tend to follow one another in the order in which I’ve presented them. Don’t let the idea of setting up these systems overwhelm you. Just start small, using the tools you’ve got, and build on those tools over time.