Archimedes said, “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
What he is talking about is that with the right tools, you can achieve a lot more with much less effort. And this ‘leverage’ is a critical step in taking businesses to the next level.
The point of it is that you do the work once and achieve the result over and over again using this leveraged system. Shweta Jhajharia, founder of The London Coaching Group outlines 4 ways that you can use the power of leverage to help your start-up succeed.
Remember the Pareto Principle, or the 80:20 rule
Before we explore the four areas to unlock through systemisation, there is a principle that you must first understand. That is Pareto’s Principle, also known as the 80:20 rule.
Originally, Pareto used this to refer to the fact that 80% of the land in Italy was owned by 20% of the population. However, it soon became evident that this can be used as a rough approximation of many other distributions. Most notably in business, it has been applied in that 20% of your clients or customers give you 80% of your sales.
In the context of leverage, we apply this in that 20% of your activity is contributing to 80% of your sales. So your focus should be on that 20% – and the other 80% of your activity should be systemised and automated.
You cannot expect to automate 100% of your business – there will always be exceptions and you need to make sure that you are carefully considering the 20% that produce 80% of your business.
But in order to do that, you must learn how to use leverage to automate that 80% so you have the time and brainpower to actually focus on that 20% without getting distracted.
Now in order to figure out where that automation can be created in your business, let’s look at the 4 areas where you can unlock the greatest leverage;
1. Systems & Technology
This is the most obvious one to most people. What technology can be used to systemise your work? How can you leverage off new software and IT systems?
You should also be asking yourself whether or not you are making the best use of your existing IT systems – are they as reactive and proactive as they should be? Are there advanced features you are not yet using?
A few areas where you should have automated systems or technology to improve your business includes: automated email systems, CRM systems, social media automation, online accounting technology, payroll systems etc.
The end goal here is to document and automate processes in your business so that it works predictably every time without requiring your intervention.
2. Delivery & Distribution
This should not just be the delivery and distribution of the actual product or service that you are providing – although that, of course, should be systemised as far as possible – but also your marketing.
What is the schedule for delivering your marketing content? What ways are you reaching out to your target person? What is your niche and how are they hearing about what you have got?
You should be thinking about ways to really optimise the way that your message is delivered, not just your product.
The end goal in this sort of automation is to get everything – your product, your message, your brand – on time to the right place, the first time and every time. There should be a focus on consistency and efficiency.
3. Accounting & Testing and Measuring
Here is where you can start digging in to some real specific numbers in your systems. How are you ensuring that every enquiry that comes in is being recorded? Are you measuring how many of those are converting – do you know the conversion percentage at every stage of your funnel?
You should have a dashboard for each department – a marketing dashboard, a sales dashboard, a financial dashboard etc. This should include the key indicators for how your business is doing so that you can have clear reports on how your business is performing, and which areas need more work.
The end goal with this key is that you are now running your business and making important decisions based on the numbers rather than by your gut. When you are leveraging the metrics and key performance indicators in your business, you start to speak the language that business speaks: numbers!
4. People & Education
Those first 3 areas, I find, most businesses are systemising already in some way or another. However, when it comes to the team members, I find that there is a large majority of businesses who are simply not leveraging as much as they should. A lot of my business mentor work is around team management and team training.
How are you doing your recruitment? You should have a clear recruitment system in place that ensures you spend the least time on it while getting the most suitable candidates for the position.
Our 4-Hour Recruitment Process was devised to help business owners do this and has proven effective with many of our business coaching clients.
What is it that you have a new recruit do? You should be have a clear induction system that lays out their initial tasks for the first three days to become oriented with your business, your core values, and their role in your business.
You should have clear Key Performance Indicators (KPIs) for everyone in your business – yourself included! You should also be ensuring they have clear annual goals and these are being reviewed each year. Those are systems in your business as well.
The end goal with this area of your business is to ensure that you are recruiting well, that you are treating your team well, and that you are training your them well so that they perform well.
As you work through these 4 key areas in your business and identify where you can automate to find the leverage, keep in mind Pareto’s Principle. You are not trying to systemise your entire business. You are trying to systemise 80% of it, and leave 20% to be the exceptions that require human intervention.
Almost inevitably, once you get these systems in place, and you are spending more time focused on that 20%, you will see your sales and profits start growing at a much faster rate.
About the author
This article has been written exclusively for ByteStart by Shweta Jhajharia, Principal Coach and founder of The London Coaching Group. Despite a competitive economy, her clients across sectors consistently achieve measurable double digit growth (over 41%) and are the most awarded client base in UK. Other articles by Shweta include;
- The 4 Rs of getting more business from your existing customer base
- How to turn your customers into your best sales force
- The 3 issues you’ll need to overcome if you want your start-up to reach £1m turnover
- How to grow referrals with Strategic Alliances – And 5 features that make for fruitful partners
- 4 Steps to building your business by hiring ‘ugly ducklings’
- How winning an award can get your business noticed, PLUS 5 ways to reap your prize’s full potential
More on growing yourself, your staff and your business
Going for growth
- Developing your startup’s greatest asset – YOU
- How finding a great mentor could help you to grow, and your business to flourish
- How you can build your business in 90 minutes a day
- Barriers to growth – how to identify them and how to overcome them
- How to avoid self-destruction and achieve your business goals
Motivating your staff
- How to motivate employees and create a loyal workforce on a budget
- How to design an effective incentive scheme for your small business
- Using staff benefits to motivate and retain employees
- How businesses can encourage a healthy work/life balance and benefit from more engaged and productive employees
- How setting up a salary sacrifice scheme can reward staff and mean lower tax bills for employers and employees
Funding your business
- How to maximise your chances of securing a small business loan
- A Guide to ‘Alternative Finance’ – the new funding options for startups and small businesses
- Finding finance for your new business – funding advice for start-ups
- How peer-to-peer lending offers businesses a new funding option
- What to do when the bank says “NO”!