One thing to spend MORE on in your business12th September 2018
Imagine the woodwork at the entrance to your house looks a little shabby, as the paint is beginning to peel.
You have a choice.
Are you going to paint a top coat over the peeling paint?
This would do the job, but you won’t have a nice finish, and before long, the paint will start peeling again, so you’ll have to repeat the task.
Or are you going to do the job properly – removing the old, flaking paint, repairing any rotten wood, filling in any holes, sanding the surface down to a smooth finish, and then applying an undercoat before you apply the top coat?
Sure, that is a lot more hassle. And more expensive, too.
But the finish will be beautiful, so the house will look the way you want it.
And the paintwork will be durable and last.
It’s a dilemma I think of, whenever companies decide to systematise the way they work.
It’s always the right decision, because you need good systems in place to work more efficiently, ensure you are not overly dependent on any one staff member, and to produce more consistent results.
In fact, systemisation is a key step in becoming a grown-up, well-run company.
But it sometimes involves buying new hardware or software.
For example, if you are trying to systematise the way you manage your finances, you may need to invest in a new accounting platform. This will enable you to process payments much faster, keep better track of your expenditure and generally be more financially efficient.
And that costs money.
Once they see the price tag, some CEOs baulk.
You wonder: Isn’t it possible to buy a cheap upgrade that can work “for now”?
Isn’t it possible to patch up or add to our existing system, and make it go a bit further before we replace it completely?
These might feel like sensible, conservative financial decisions.
But they are often (not always) the wrong way to go.
Systemisation is about putting into place the tools and processes you need to work in the best, most efficient possible way. Ultimately it is about preparing your company for growth.
And as CEO, you have to be willing to spend to achieve this strategic goal.
When you try to systematise half-heartedly, on the cheap, you are often hobbling your staff – instead of helping them become more productive.
And you get locked into a constant cycle of upgrading every time you outgrow your system…
Just like the guy who has to repaint the woodwork at the entrance to his house every couple of years, instead of doing the job properly the first time.
Stop thinking of technology as a cost. When you see it that way, it’s natural to opt for cheap, short-term solutions that ultimately let you down.
See it, instead, as an investment. Step back and picture the technology that needs to be in place to support your company as it grows to £5m, £10m and beyond.
Smart CEOs don’t (just) ask themselves: “What does this cost?”
They ask: “What investment makes sense to achieve sustainable growth?”
Being too focused on the former, rather than the latter, is the second barrier that stops CEOs instituting effective systems, despite the best of intentions. Next week I’ll reveal the third.
But in the meanwhile, if you would like help creating robust financial systems and processes for your business, hit ‘reply’ and let’s talk.
Corporates take strong financial systems for granted. It gives them the ability to plan ahead, invest in the right places and ultimately to generate more profit.
You can get the same advantages today, so you can grow to £5 million, £10 million – and beyond.
Put the right foundations in place…