Products Make You Money, Systems Make You A Fortune

Sep 26, 2023


Products Make You Money, Systems Make You A Fortune

In the ever-evolving world of business, success isn't just about having a great product or service; it's about having a well-oiled machine behind it.

Unlocking Success Through Systems

Creating systems within your business is like planting seeds of prosperity. However, not all systems are created equal. The most valuable ones are those that can be replicated. Think about it this way: if your business depends on a single genius or a superstar talent, it's challenging, if not impossible, to duplicate. This is precisely why Warren Buffet, the legendary investor, steers clear of high-risk tech startups or ventures reliant on a few superstars. Instead, he invests in "boring businesses" that deliver staple products, possess strong management, generate substantial cash flow—and thrive on systems.

The Magic of Replicable Systems

Replicable systems are your ticket to financial success. They open doors to various opportunities, including:

  1. Customer Attraction: Your consistency in delivering results will draw customers to your door.
  2. Licensing: Others may want to license your system to replicate your success.
  3. Franchising: Entrepreneurs may seek to buy into your franchise system.
  4. Investment and Acquisition: Investors or competitors might want to purchase your business, enticed by its systematic brilliance.

The Four Pillars of Business Systems

No matter your industry, four types of systems are fundamental to achieving lasting success:

  1. Marketing System: This system ensures a consistent flow of leads into your business.
  2. Sales System: It handles lead nurturing, follow-up, and conversion.
  3. Fulfillment System: This is where you deliver your product or service in exchange for customers' hard-earned money.
  4. Administration System: It encompasses tasks like accounting, reception, human resources, and support for other business functions.

Irrespective of your business's nature, these four functions are crucial.

The Pitfall of Neglected Marketing and Sales Systems

Many small businesses fall into the trap of focusing too much on fulfillment and administration while neglecting marketing and sales systems. The urgency seems to lie elsewhere, and the business may struggle despite offering exceptional products or services. After all, customers can't appreciate your excellence until they've purchased from you. Without robust marketing and sales systems in place, they might never get that chance, perpetuating a detrimental cycle.

The Power of Business Systems

So, what exactly is a business system? At its core, a business system comprises documented procedures and processes that allow your business to thrive without your constant involvement. These often take the form of checklists but can also include video and audio training—a collective wisdom repository known as an operations manual.

A shining example of business systems is none other than McDonald's—a global, multi-billion-dollar empire primarily operated by teenagers. Their operations manual leaves no stone unturned, from hiring practices to the exact amount of sauce on a Big Mac. McDonald's success lies in its impeccable business systems.

Why Business Systems Are Overlooked

Two major reasons lead many small business owners to overlook the potential of business systems:

Perceived Boredom: Business systems are considered "back-office" functions, and their creation may seem mundane. However, the power they offer is far from boring.

Lack of Urgency: In the hustle and bustle of starting or running a small business, fulfilling immediate needs often takes precedence. Business systems might be postponed, leading to unintended consequences.

The Benefits of Implementing Systems

Implementing systems in your business comes with a plethora of benefits:

Asset Building: A well-structured system transforms your business into a valuable asset that can be sold for a substantial sum.

Leverage and Scalability: Systems enable you to expand, whether through replication in different locations or by franchising and licensing.

Consistency: Consistency is the key to delivering an exceptional customer experience—a hallmark of successful businesses.

Lower Labor Costs: Efficient systems reduce the time and effort spent reinventing the wheel, ultimately lowering labor costs.

In conclusion, remember this mantra: "Products Make You Money, Systems Make You A Fortune." Building and implementing replicable business systems may not always be glamorous, but the rewards are nothing short of spectacular. Your business will not only thrive but also be well-positioned for sustained growth, financial success, and the possibility of achieving your ultimate entrepreneurial dreams. So, get started on your path to fortune through the power of systems.