Introduction
In the first year of starting a new business, it is critical to create your startup systems and processes so that you are as efficient as possible. In this column, we’ll cover what systems and processes are, why they are important, and how you can create them in your first year of startup. I’ll also share my experience with systems and processes from eCommetize and FreeeUp.
What are Startup Systems and Processes?
Startup systems and processes are the first blueprint for how your business will function. They outline the major areas of your business model and identify specific tasks that will need to be completed in order to run your business properly.
Systems are the bigger picture workings of a particular area of the business. Think marketing, product development, or financials. Each of these areas of the business have a system that governs how the people act, how technology is integrated, and how to make change.
Processes are the actual tasks within each system that optimizes the performance of that system. Think creating projections, managing credit cards, and developing reports for the financials system. Without clear guidelines for those particular processes, the financial system and financial branch of the business would not be as effective as it could be.
Why are Startup Systems and Processes Important?
Having startup systems and processes in the early stage of starting a new company offers you the opportunity to stay organized, develop a competitive advantage, and fully understand how to scale your product/service.
Going into a new startup, there is an endless amount of unknowns with regards to product/service, financials, and customer market. Gratefully, your systems and processes can become one area of your startup that you can clearly define and make more certain at the get go. If you want to create the ability to steer your startup in the right direction, identifying and forming a foundation for your systems and processes is one of the first steps forward.
Prioritization
Startup systems and processes allow you to prioritize. If you understand what it takes to run all aspects of your business, you can properly align it with your recruitment and hiring strategy. Based off of your quarterly goals, you can also prioritize which systems and processes are the most important in the short run.
Competitive Advantage
Develop a competitive edge over other startups in your space by having systems and processes that make you more efficient.
Scalability
When you properly develop and document your startup systems and processes, you place yourself in a position to quickly scale your operations by hiring and training the right people.
How to Create your Startup Systems and Processes
I have found that the most effective method to create systems and processes is to hit the whiteboard and make it visual.
Activity
Gather together with your key team and spend as much time as needed to outline the full pipeline that defines your business operations. Successful businesses have a method in which customers flow through their system.
- Start with the systems: name all of the major areas of your business that require significant maintenance and progression by one of your team members.
- Break each system down into the processes that must be completed. Write each process up on the board.
- Rearrange your systems and processes to agree with the way that a customer flows through your business model.
- Go through each set of system and process and identify responsibilities that you may not yet be performing.
Once you’ve finished the task, you should have a depiction of how your startup ticks. In a future column, I’ll discuss how you can use your systems and processes to develop team roles and responsibilities. It is an important step to create focus within your founding team and to create growth in multiple areas of your startup.
My Experience with eCommetize and FreeeUp
When we first decided that we were going to start eCommetize and FreeeUp, I set aside an entire day with each co-founder to review the systems and processes of each business. We had completed the Four Pillars of Startup for both businesses so we already had a good idea of what we were getting ourselves into.
From our first experience with Portlight, we learned how important the organization of teams and tasks is to the long term success of your business. The better defined and the more documentation that we created while running Portlight, the more efficient our company became.
For our new companies, we wanted to set a similar standard. I spent an entire day at the whiteboard with each of my co-founders and we slowly worked out way through the entire pipeline. The activity opened our eyes to where we had to focus our time in the first quarter of starting each business and where our focus would transition once we had a foundation set up.
How It Has Helped in our Founding Stages
Having well defined systems and processes has allowed us to grow more rapidly than usual. Instead of making mistakes and discovering a hole in our operations, we’ve created a bulletproof structure of what is needed to make each startup a success.
The structure has allowed us to strategically hire for specific processes within each company and divvy up our roles to focus on our strengths. When your founding team is focused on different aspects of the operations where they excel, you are able to develop specialties and make progress faster.
Make Time for Systems and Processes
Don’t overlook the importance of fully understanding the operations of your startup. The more control you have over the systems and processes in your first year of starting your business, the better off you will be.
If you want to create your startup’s systems and processes, but don’t know where to start, reach out to me at Connor@ConnorGillivan.com. I’m more than happy to speak with you and provide further guidelines to an activity that you can use.
