How a systematised agribusiness can get you more (growth, time, profit) for less work
What do you consider to be the Holy Grail of building or expanding your business?
To us, the dream is to create a business that runs efficiently and maintains its profitability while you, the business owner, are absent. This might mean:
- You can go on a holiday – with no worries about what happens while you’re absent
- You can undertake professional development – any time, anywhere
- You take time out to work strategically ON business growth – rather than working In the day-to-day operations of the business
- You can retire – or not, anytime, or
- You now have the time, flexibility and mindpower – to build other businesses or pursue other forms of investment / income.
At ABDI, we refer to this as a self-managing business. In ‘dollar’ terms, the business can generate you passive income, or ‘make you money while you sleep’. In mental and emotional terms, it means you can move onto other things, knowing that all is well with the business.
Before we go on – are you thinking this sounds like a gimmicky sales article about pyramid schemes or an online ecommerce business – or it’s too good to be true? In reality, this outcome is completely possible with your agri-business. Whether it be a broad scale grazing operation or an intensive horticulture operation, there are ways to remove yourself from the business.
It’s all about the systems
The secret to this is developing a systematised business.
A systematised business means you create systems and procedures that ensure the business achieves consistent outcomes, in all areas, all the time, without needing your constant input.
The next part of the secret is to have other people run these systems for or with you. But, that’s another story (read more here on creating a “high performing team”).
Systems can range from a simple document template to a complex decision making protocol. The most important thing with systems is that they must be ‘size-appropriate’ and ‘fit-for-purpose’. It’s no good developing systems without the resources to manage them – or that are unsatisfactory to the task and outcome needed.
What is really meant by systems?
The purpose of a system might be:
- To take the ‘hack work’ out of your finances – leaving you free to review the progress in meeting your financial goals
- To ensure ‘lower-skilled’ personnel (i.e. backpackers or labourers) can undertake operational tasks – leaving you free to focus on business growth and strategic decisions
- To ensure all personnel know exactly the process and expectations – to ensure a consistent outcome every time regardless of your input
- And more.
Examples of appropriate systems include:
- Engaging and managing a book-keeper – and developing processes to allow them to input your financial data, pay accounts after authorisation, provide you with reports and get the data ready for your accountant
- A spreadsheet template for the team to use during a routine activity such as cattlework or other production task(s) – with tasks noted, a description of how they are undertaken, timeliness, what data to record, etc so that team members know exactly the expectations and process to use
- A protocol (could simply be a Word document) that states the process to be followed when hiring a new team member
- Development of an organisational chart and formal roles and responsibilities, so everyone knows who is making what decisions – and how they are accountable (including their agreement to be accountable)
- And more.
What business areas can be managed with systems? Most can, whether its production tasks, administrative tasks, financial management, staff management, most of these areas can be systematised.
3 ways to do this:
1. Develop systems for routine tasks
Routine components of the business (i.e. tasks that are undertaken frequently, and by different team members), can be systematised.
Many business owners likely already do this, though often it is informal. Informality provides room for human error and mistakes, issues with quality management, and invariably results in a suboptimal outcome.
- Staff management – including families. If you manage people, develop a performance management system. This might include tracking performance against a series of Key Performance Indicators (KPIs), with routine meetings to assess progress. Once the system is established with employers and employees ‘on the same page’, performance is likely to improve.
- Customer management. Keep an up-to-date database (this can just be a spreadsheet) of all customers (actual and potential) and make a habit of engaging with them on a routine basis, to get feedback on your product / service and find out what else you may be able to offer them.
- Production tasks (cattle work, vegetable packing or grading, QA, etc), where lots of data needs to be managed to assess and improve quality and management, good record keeping to review how things operate (against KPIs) is critical.
2. Surround yourself with, then empower, quality people and teams
While systems are designed to take the ‘human error’ out of things, good quality people are needed to manage, drive and adhere to the systems. Many employees simply see ‘using the new system’ as a hassle – if so their thinking must be re-positioned. All staff must be made aware of the Purpose of the system, and also must be empowered to use the system properly.
3. Commit and see it through
Too often business owners start to develop systems, then realise there’s more work involved than they first thought. And then, even more work in getting others in the business to stick to the system.
Once an area that needs to / could be systematised is identified, create some steps over time to allow you and the team to stick with developing the systems. It may require revisions, but in the long run the right systems always pay off. Remember to be ‘size appropriate’ and ‘fit for purpose’.
It’s also about mindset and your own personal patterns
We’ll touch on this here, however this is a topic for another day, because discussing mindset and patterns is like ‘opening Pandora’s Box’.
How you, the business owner, operates is a significant reason why so many business owners are challenged in successfully creating a self-managing, systematised business. By ‘operates’, we are referring to how your actions are influenced by underlying patterns and beliefs.
When a business owner grumbles that “I can never get any time off” or “I’m so busy but I can’t trust anyone with what I’m doing”, this often unconsciously (or consciously) demonstrates they actually don’t want to give away control. Using justifications such as saying “no-one else can do as good of a job as me” is actually about retaining control. And at a deeper level, this satisfies many of our human desires of feeling ‘needed’ or ‘useful’.
Other unconscious patterns are rooted in Australian culture (always needing to be ‘seen to be busy’, not being a ‘slacker’ or someone who ‘has it too good’).
Adhering to and buying into these traits simply doesn’t serve us well as business owners, because it undermines the very thing we are trying to achieve – a self-managing, profitable agribusiness. Practice being mindful about your underlying motivations when making decisions in your business, particularly around developing systems and relinquishing control.
Looking for help systematising your business?
Creating a self-managing, profitable agribusiness is the focus of the team at ABDI Advisory. Our team can support you in identifying the required systems for your business to move forward, and then developing fit-for-purpose systems, designed to help you grow your business, but also to help remove you from it. To get started, simply request a free 30-minute consultation with an advisor today.