Can You Explain What A Business System Is And How To Create One?
Question: Can You Explain What A Business System Is And How To Create One?
Dear Joe. You are always talking about systems. Could you tell me what a business system is and how it can help my business? Also, how can I create my own systems?
Jean P. – Springfield, IL
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Read Transcript for “Can You Explain What A Business System Is And How To Create One?”
As a real estate investor, you need constant cash flow coming in – and a business system to keep it that way. I’ll explain more…
“Dear Joe, you’re always talking about systems. Could you tell me what a business system is and how it can help my business? Also, how can I create my own systems?” – Gene in Springfield, Illinois.
Joe: Well, Gene, let me explain a business this way: 90% of all new brand new businesses fail in the first year, but 90% of all brand new franchises succeed. Now, why is that? Franchises have business systems in place.
Joe: Let’s take a McDonald’s for example (since everybody knows about McDonald’s). You go into a McDonald’s and it doesn’t matter whether you’re in a Paris McDonald’s, a Des Moines, Iowa McDonalds or an Indianapolis, Indiana McDonald’s – they all work pretty much the same, and they have the same systems that they use for each of their stores.
Joe: They’ll have a system for making a Big Mac. They’ll say, ‘You put the burger on, and press this button, and when that buzzer goes off, you flip the burger. And when it buzzes again, that burger’s done and you put it on the bun and you use this kind of bun.’ And, they have these little pictures on the wall for the people that are making the food that show them exactly what they need to do. It’s like a little comic book that they have to follow for this process.
Joe: And it just goes through and says, ‘Put the special sauce on. Put the lettuce on, put them in this kind of box, wrap them up and put them in this kind of container. If there are this many hamburgers, then you put them in this kind of sack,’ etc. – very detailed stuff. Also, keep in mind that McDonald’s has a 200% employee turnover every year, so they have to take really low level skill people, people that have never done this before, and have them work at a very high level.
Joe: What you get at McDonald’s is very consistent. You may not like the food, but the food is consistent – it’s the same every time that you go there or at least basically is the same. So, that’s what you’re trying to do with a system – you’re trying to make a low level skill person perform at a high level, and that way, you can delegate that work to someone else instead of doing it yourself.
Joe: Systems are very important to a business. If you implement systems, use the “Push Button Method”, the “Millionaire Matrix”, all of the different systems that I have, i.e. The “Stupid Proof System”, the “Snowball Effect” – all of these different systems that make your business work as a real estate investor and as a real estate agent, your business will be much more stable, and it’ll also be something that you can sell later because you don’t have to be in it; you can extract yourself from the process and you can work a whole lot less. Anyway, I hope that helps. Bye, bye.