Effective Ways to Streamline Your Business
Once you’ve got your business off the ground, it is easy to be lulled into complacency about how it operates. Your bottom line is finally showing a profit, which is a massive relief after the time and money you have plowed into it.
However, you need to question if your business is maximizing its profits. The answer is likely to be in the negative since there is always room for improvement in operational efficiency. Streamlining is an ongoing process that often works on a trial and error basis to see which strategies work the best.
Here are some ideas for how to streamline a business:
1. Analyze the whole business
Before you can identify the areas of your business that need to be streamlined, you need to have an overview of how the company operates. Start with a list of the different departments and their functions. Look at what human and other resources are necessary for the fulfillment of these functions.
Examine how well each department does when it comes to meeting deadlines and targets to see if your requirements are realistic. Study employee productivity to determine if your employees’ time on the job is put to effective use.
2. Utilization of resources
Any business needs resources to function. However, each company has unique resource needs. Don’t model your organization’s resourcing plans on those of another business. Someone else’s plans might not work for you.
Before you start, analyze what resources your company uses, how many of each is used, and how often each is ordered. Using enterprise resource planning software gives you the chance to obtain accurate information. You can then order resources right before you need them. You won’t waste money on buying and storing deadstock that you cannot use or get rid of.
3. Find the bottlenecks
Looking at the chain of functions in your business and the order in which they typically occur, identify the areas where bottlenecks exist. A bottleneck slows down or blocks the flow of the organization’s work. It prevents functions from being completed on time.
Before you start implementing potential solutions, you must know what is causing the bottleneck. There may be a shortage of human resources, training, or materials. Map out the current process and find out what you can do to speed things up. It might require input from the people who work in that department as they can give you insight from the coalface of the situation.
4. Value-chain analysis
The chain of events that your business operations usually follow must always provide value to the product. Where links in the chain do not add value to the company’s output, they might need to be eliminated.
One of the focus areas in a value-chain analysis is the marketing of products. This encompasses the branding, packaging, and advertising of goods and services.
You might be spending a small fortune on having labels printed for your products. However, if they don’t make your brand more recognizable and boost sales, they won’t add value to the organization.
5. Employee productivity
It’s hard to monitor employee productivity without your employees knowing you’re doing it. However, a casual observation of how they spend their hours at work is necessary. It is also critical to look at their output at the end of each day.
Before hiring a data entry clerk, make sure that the one you already employ is being productive. Training and development could help you get double the amount of work out of one employee. The money spent on getting the employee on track will be significantly less than hiring and paying another worker.