If there’s one thing that drives small business owners crazy, it’s inefficiencies in their business. Inefficiencies costs money, time, and even clients. Every dollar, and every minute of your day, counts when you’re an entrepreneur. The last thing you can afford is business inefficiencies, especially when streamlined alternatives exist.
Most small business owners are open to change, but they don’t always know where to look for it or how to implement it. After all, keeping your daily operations afloat is a full-time job in its own right. This makes it hard to find time to step back and look at your company’s processes and workflows to find areas of improvement.
Every small business is unique, but most experience similar operational setbacks and inefficiencies. This is particularly true when communicating effectively, delegating authority, managing inventory, and managing small business finances. Here are five easy ways to make your business more efficient regardless of your industry.
1. Don’t be afraid to kill underperforming products
Writers have a saying about how to handle plot lines and characters that don’t fit: “Kill your darlings.” To kill your darlings is to get rid of what doesn’t work. And as a small business owner, sometimes you have to kill off an underperforming product or service.
Letting go of what doesn’t work frees up bandwidth, budget, and attention for the parts of your business that are driving revenue and bringing in new customers. It’s not always easy to kill your small business darlings, particularly if what’s on the chopping block was once expected to be a blockbuster success. Maybe the product or service in question was what you used to launch your business, but you’ve found that it just doesn’t fit your business model anymore.
As hard as it is to cut it loose, it’s what you need to do to make your company more efficient. It’s better to make these tough choices than to fall victim to the sunk cost fallacy, business-speak for throwing money at failing ideas and funding plans that don’t return dividends.
2. Embrace digital platforms
If you haven’t ditched paper and pen to run your business yet, you’re missing out on a huge efficiency opportunity. Paper records are hard to organize and easy to misfile. They can even lead to missed business opportunities if your important business card ends up in the circular file. It might seem daunting at first to onboard small business management tools (especially if you’re a technophobe), but the ounce of pain you feel at the beginning is better than the agony of disorganization.
There are many great options out there to help you automate just about any element of your business operations, be it marketing, sales, client leads, or inventory management. If you’re accustomed to print marketing, set up a Google My Business storefront. If your lead generation strategy is a 30-year-old Rolodex, opt for a CRM platform instead. Transform your manual accounting work by onboarding new bookkeeping software. Or if your biggest need right now is writing a business plan, opt from one of the several digitally driven tools on the market.
Business software and platforms can replace just about anything you currently manage by hand. You’ll free up your time to focus on other elements of your business, and you’ll get a better record-keeping system that reduces the risk of human error. Plus, you can tout how digitally savvy your company is, which gives you an edge on the competition.
3. Use communications and productivity software
Digital tools don’t just help you manage business operations. They can also make communication easier for your staff. Email, although vital for every business, can be a burdensome way for your team to communicate. According to a 2016 survey by CareerBuilder, around a quarter of respondents said email is a major productivity killer for their daily operations. Meanwhile, a similar 2015 survey by RingCentral found 85 percent of management personnel surveyed use more than one device to communicate while at work.
Instead of blasting out yet another email, modern communication platforms like Slack can help employees talk in real time, reducing the need to read and reply to individual emails. These tools function similarly to chatrooms, where several people can talk in one place and collaborate on projects or tasks without wading through dozens of emails.
Other great productivity platforms include Trello, Airtable, Microsoft Planner, and Monday. Each of these tools helps you manage projects, mark milestones, and keep track of everything your small business does. Many of these tools come with free options that are great for small teams or have inexpensive rates for bigger teams that need more features.
4. Track your cash flow
Although technology offers a lot of efficiency opportunities, there are other tactics you can use to make your business run more effectively without having to onboard new platforms. In fact, one of the biggest efficiency boosters is keeping better track of your finances — and for that, you’ll want to look at cash flow.
Cash flow is the lifeblood of your business. You need to keep taking money in so you can buy more inventory, purchase more raw materials, pay your staff, and pay for utilities. It’s important to know where your money’s coming from, and it’s even more important to track where it goes. Tracking cash flow helps you do both. You’ll keep an eye on how quickly your clients pay their invoices, how much money goes out the door by way of expenses, and how much liquid capital your business has on a daily, monthly, quarterly, or yearly basis.
There are several ways to take control of your cash flow analysis. Some are digitally driven and come as part of an accounting platform or software package. Others can be self-driven by way of spreadsheets that you manage manually. No matter which cash flow analysis method works best for you, be sure to keep an eye on this vital metric if you want a better view of potential financial inefficiencies within your business.
5. Empower your employees
The best thing you can do, as a small business owner, is empower your best employees to make their own decisions. As long as you have a few trusted employees who know the business almost as well (or, ideally, just as well) as you do, you can provide them with the autonomy to handle on-the-fly situations and make decisions.
Delegating responsibilities isn’t just great for your workflow. It’s also a wonderful way to keep your best employees engaged and motivated in their roles. You’ll make your team feel critical to the success of the business and take a significant chunk of items off of your daily to-do list. Plus, you’ll create a shorter decision tree for your business, which will let you take advantage of new opportunities.
No matter which tactics you embrace to make your business more efficient, the most important thing you can do is keep an open mind. The small business owner who isn’t afraid to innovate, take risks, and think like a scientist (that is, experiment and review results) is the entrepreneur who may find new opportunities as a result. Even if some of your efforts don’t pay off immediately, you’ll prime your company’s mindset for future growth through innovative thinking. Eventually, you’ll find the efficiencies you’re looking for.