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Systemizing vs Standardizing Your Business Model

           

March 3, 2022 / fbcadmin

Kerrie Sheaves
Foundational Business
1300SMLBIZ

How do you decide whether or not to systemize or standardize your business?

There are two ways to organize your business: systemizing and standardizing. To systemize means organizing your business around a specific theme, whereas standardizing means organizing your business according to its function.

You should choose whichever method suits your business better. For example, if you run a restaurant, then systemizing might be a good idea because it allows you to focus on the food instead of the other aspects of running a restaurant. On the other hand, if you want to sell clothes, then standardizing would be ideal because it makes it easier for customers to find exactly what they want.

The most important question to ask is whether your customers need and expect a bespoke tailored service from you or a service /product that is the same every time for everyone?

If you’re in the latter category, then standardizing will suit you best. However, if you’re in a situation where people really appreciate being able to order something unique and special, then systemizing may be more suitable.

There’s a lot of confusion about this term. Many businesses use “systemize” as a synonym for “standardize”. This is incorrect.

The difference between the terms is that systemizing involves creating an organized structure around a particular concept, while standardizing involves creating a consistent structure across all products (or services).

For example, let’s say we’re talking about a clothing store. If our goal is to create a standardized product line, we could have different styles of shirts for men, women, children, etc., but each shirt would be the same size and color. We’d also make sure that the price was the same no matter which style we sold. In this case, we’ve created a standardized product line.

However, if our goal is to design a custom-tailored shirt for each customer, we would first need to determine what kind of shirt he/she wants. Then we’d go out and buy fabric samples for each type of shirt we thought he/she might like. After that, we’d get together with him/her and discuss his/her preferences – colors, patterns, sizes, etc. Once we had determined those things, we’d start cutting up the fabric samples into individual pieces. Finally, we’d assemble the shirt by stitching them together.

In this case, we’ve systemized the process of designing a custom-tailored garment. It takes longer than making a standardized product, but it creates a much higher quality result.

So when choosing between systemizing and standardizing, the choice comes down to how you view your company. Do you want to offer only one product (a standardized product) or many products (a customized product)?

 

Standardization is the act of standardising something. Systemisation is the act of organising something. So, yes, standardization is a subset of systemization. But not the reverse.

 

Do I need to systemize or standardize my business?

The answer depends on what you mean by “business.”

If you are asking if you should standardize your business, then the answer is no. You don’t have to do anything. Your customers will come to you because they know they can find exactly what they want from you. They won’t care whether you sell a standardized product or a customized product.

If you are asking if you need to systemize your business, then you need to decide if you want to offer only a single product or multiple products. If you choose to offer multiple products, then you need to consider how you plan to differentiate yourself from your competitors. For example, if you sell only t-shirts, then you may need to think about offering other types of apparel as well.

Another way to look at it is to ask yourself these questions:

  • Does my current business model work?
  • Is there room for improvement?
  • Is there a better way to do things?

If the answers are yes, then you need to systemize. Otherwise, you need to standardize.

Building systems in your business can save you time and money

“People don’t run businesses …Systems run businesses and people run systems. . . . If you have a good system anyone can follow it and get a good result every time.” Michael E Gerber (The E-Myth)

Building systems in your business can save you time and money. But, it doesn’t happen automatically. You’ll need to put some effort into building systems. And, once you’ve built them, you’ll need to keep them running smoothly.

To build a successful system, you’ll need to understand how your business works. This means understanding your customers’ needs and desires. It also means understanding your own strengths and weaknesses. The more you know about your business, the easier it will be to create a system that suits you.

Once you’ve created a system, you’ll need a team who understands it. That’s where your employees come in. They’re the ones who will actually use the system. They’ll make sure it runs smoothly. And, they’ll help you improve it over time.

Getting clarity over your business model is essential

Before you start building a system, you’ll first need to figure out what kind of business you’re in.

This might seem like an obvious question, but it’s easy to get confused here. There are two different ways to define business models:

1. A business model describes the structure of a company.

2. A business model describes how a company makes money.

Contact us today to help you get your business model on the right track.

Call us to find out more today!

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