When does investing in systems make financial sense? This is an interesting topic and it came up.
I was talking with some of my buddies, and we're discussing, hey, at what point do you move to systems.
And I say, You know what, it's an interesting decision because the system's investment is a one-off investment, but the benefits last forever.
And this is exactly like an asset.
So when you buy shares or stocks, you're buying with a set investment, you like, Okay, I'm going to put $10,000 in, and then that stock will return, let's say, 5%.
So you get paid $500 a year, for as long as you hold that stock.
So you get your money back in, whatever that's going to be, it's hopefully going to be a little less than than 20 years with inflation and all that sort of stuff.
But 20 years later, you get your money back.
And then from there, you are profitable.
But one of the interesting things about systems is that they have a vastly increased return on investment than that, really the only other competitive thing to systems is advertising.
And for those of you who are doing advertising aggressively, you will know that you can get a very large return on ad spend that really makes investing in the stock market look kind of ridiculous.
But anyone leaves that for no discussion, you want to go and check that out, go check out traffic and funnels, go check out Frank Kern go and check out any of the guys teaching return on ad spend.
But we're talking systems here.
And I thought You know what, maybe there's an example like, let's say that you had a team of six, you and your team of six, and you've got them working full time.
So about whatever that is 40 hours a week, six people 40 hours a week.
And let's say on average, you're paying about 30 bucks an hour.
So your monthly wages, your monthly payments to your team are going to be just a bit over $31,000.
So you can do the numbers.
And just obviously, it's going to be far more specific with your actual team.
But let's just say that, for whatever reason, your systems game is not great at the moment.
And that means that a lot of your team have to do things over and over, they're just not that efficient at getting things done.
It means there's a lot of fires, for you to put out, there's a lot of problems, you are just taking a lot longer to get the work done.
Because your systems game is not great.
And this is an easy place to get to like the actual growth to six, almost you don't want a system you just want to go.
And if you do know how to do systems, that's great.
Obviously, you can do that initial growth with a lot less.
But a lot of businesses, they're like, let's get running, let's get selling, let's get money in the door.
Let's get us, our products defined.
And then we'll deal with the systems, things like that.
But with six people on your team, you might be thinking, you know, what, what is the investment? What is the return on investment? And let's say that, for whatever reason, it was 10 or $12,000 to get your systems done, you're like, oh, wow, I'm going to pay how much? Is it? $12,000? You gotta be kidding me.
That's ridiculous.
Like, yeah, and till you consider that you've paid two people for no reason.
You literally have two people doing work that if you had systems, you would not need them.
And you're like, what you like, yeah, your systems game is not that great.
You're solving a problem with people, that really should be a systems solution.
And when you have your systems in place, then then you only need four people to do the work that six are doing now.
Now, what does that mean? Well, that means in month one, you're in exactly the same position.
Because it's going to take a little bit of time, you've made the investment, and perhaps even your $10,000 Worse, but the month after, you're like, oh, I'm getting this and maybe you let one person go.
04:19
And so there's $5,000 back, and the second month, you still at five people, and then there's $5,000 back.
Now notice at this point, you've almost broken even if it's 10, you've broken even if it's 12 you go a little bit more to go.
But let's say that you stand to get the systems thing.
And not only are you seeing that you need fewer people, but you're also actually getting way more done.
So you're getting increased productivity with fewer people.
And so you decide that you're actually going to stick with the game and drop another person you got to fire another person and this is harsh.
This is a harsh reality of on point systems that you need fewer people to do the work We've already got this problem coming anyway with AI and robots, but it's probably 10 years away.
Nevertheless, it's pretty hard to laugh at the people but you chose to do it, you do it and you're like, Okay, now, now you are doing the same or more work with a monthly investment of 20,000 instead of 30,000.
Now, where does that 10,000 Go, that goes straight to your profit, straight to your profit, like that's not going anywhere other than your bottom line?
So your single investment of 10k at month three is equal.
And then from there, every single month, you're making 10, grand 10, grand, 10, grand, 10, grand, 10, grand, 10, grand, 10, grand, 10, grand, 10 grand, 10 grand.
And you avoid the bottleneck that happens when you do continue to grow.
Let's say that you're actually doing well, you got you four people and you guys are nailing it, you're getting a lot done, business is actually beginning to expand so you bring someone else back on, but realize you're not bringing them on into the previous lack of systems, you're bringing them into a systemized business.
And it's always easier to bring new people into old processes than it is to get old people to do new processes.
So your new team member is being inculcated to a new culture assistance culture, where it's very clear exactly what to do.
Ideally, all of your systems across your entire business should be set up with the same structure, not the same work, obviously, the work is going to be very different if you're doing marketing, or sales, or accounting or taxes, or optics, whatever those particular aspects of the business are.
But if you set up the structure the same, this gives you the advantage that you can rapidly onboard someone because everybody knows the structure.
And you can also cover work when somebody's sick.
Now, they may not be at that elite level of someone who's just doing that work all the time.
But at a pinch, you can take someone out of accounting and drop them into sales and you can take someone else sales and drop them into accounting.
Depending on what your need is why only you can do this if the structure of the systems is the same.
This is a key insight that I want you to grasp out of this.
How you set up your systems makes a massive difference to your productivity.
That's all I got for you today.
I hope you got some value out of that.
I hope you enjoyed a little continuing journey into the power systems create results look forward to seeing in the next episode as we continue this journey, see you then.
