Increased productivity is key to operating a successful small business. Advances in technology and changing customer expectations has created a need for higher productivity for businesses. Canadian entrepreneurs not only have to compete with their North American counterparts but also with companies in countries such as China and Indian where labour costs are a fraction of what they are here.
“Productivity” is traditionally measured by comparing how well your business converts input, such as labour, materials, machines and capital, into goods and services or output. Nowadays, this is no longer limited to measuring ratios of input and output. Increasing productivity is all about working smarter.
Here are some key strategies that can help you increase your small business’ productivity:
Use technology to improve your operations. Invest in ICT.
Web-based information and communications technologies (ICT) can help you dramatically improve how you run your small business. Production management tools vary from spreadsheets to generic software solutions or business-specific, custom-developed apps.
A great example for this is getting a smart inventory control system. This can enable you to not only regulate inventory but also improve profitability and speed up customer response time. Online order management systems combine your company’s inventory information with your purchasing, accounting and e-business systems. This lets you easily track order status and movement of inventory within the company. You can easily identify peak and low periods in your business and adjust supply purchases accordingly, managing your working capital better.
Often, small businesses tend to overlook the importance of a web presence. Good web presence this can really improve visibility in the market. Everyone is on the internet today. For most businesses, the target consumer is easiest to connect with via the web. Even if you invest in other channels like tv and radio for exposure, don’t ignore the value of a well-maintained website. There are many design companies offering web solutions customizable to your needs. Shop around to find the right fit. It’s a small investment that can go a long way for your business.
It’s important to stay updated on new technology relevant to your business operations. Make sure your business is taking advantage of the latest innovations to improve productivity. The easiest way to stay updated is to do a bit of research. Attending trade shows is also a good way to stay on top of new tech since software vendors often advertise at these events. Another good idea is to network with other companies in your industry who may have tried and tested new tech you are interested in. Knowing what technology competitors are implementing can narrow down your search for industry-specific solutions that might work for you.
Cut waste. Review your existing setup.
One of the main reasons for inefficiency in an organization is the waste of resource. Left unchecked, especially for small businesses, wasted resourced will almost always end in the death of your venture.
The best way to spot mismanaged resources and avoid waste is to look at your processes from the point of view of a potential investor. Keep in mind the overall objective and vision behind your business, and ask yourself if the processes in place meet those goals and add value.
It’s important to accurately map each process in relation to the general operation of your business. This helps you get a thorough understanding of the links between the different elements of your production chain. Once you go through this, you can better identify and eliminate wasteful practices and processes within your company.
Implement formal continuous processes to measure and improve productivity.
Improving productivity of your operation is an ongoing effort, so it’s important to set up an ongoing improvement plan.
Start by analyzing your competition and the best practices in your industry. Instead of copying plans from other businesses, use the information to develop a plan that works for your company.
If possible, get an objective assessment of your business’s weaknesses and strengths using a third party. An objective viewpoint makes it easier to avoid overlooking details when building a plan to improve productivity and redesign processes.
Take a step-by-step approach to improving productivity, rather than trying to tackle all the issues at once. Focusing on a few priorities at a time lets you see results faster, motivating you and your team to keep going. Similarly, delegate and assign problems or processes for a redesign to teams with expertise in the area.
It might seem like a small thing, but a formal suggestion system for employees to contribute ideas is a great way to get feedback on how your business can function better. Keep an eye out for breakthrough accomplishments. Even small improvements can majorly contribute to increasing productivity.
Finally, make sure to measure your productivity over time. Diligently measuring your productivity will help you track what changes are actually working for your business. You need to know exactly which core functions are helping you increase revenue and productivity.
Before you invest in efforts to optimize, familiarize yourself with the current and future needs of your business.
Measuring and improving productivity will generate tangible benefits for your business. For an SME to grow it’s crucial to measure your business’s productivity against formal metrics. Most entrepreneurs expecting at least 10 per cent plus annual growth over three years comprehensively measure their productivity.