money-21

With the current uncertainty in the global economy and the relentless march of competition, whether you’re a drainage contractor or international facilities management company, it’s now more important than ever to ensure your business is running efficiently.

If you’re anything like me, you’re always looking for ways to make your business more efficient.  I speak with the owners of small and medium size businesses on a daily basis, and I find that even the best companies have scope to improve their efficiency.

Efficiency, however, is a broad term that could mean a lot of different things. But what it really boils down to is one question: how can my company make the biggest profit in the smallest amount of time?

  1. Figure out how much money you’re throwing away. Then find a way to reduce it.

How often do you lose money because of simple mistakes, like missing a job or sending out an invoice with incorrect details? How often are your invoices delayed or forgotten? How often do you search for information to answer a complaint from a customer?

Even if you accept a certain amount of waste as being inevitable, the fact is that lots of small costs can add up over the year, potentially taking a large chunk out of your profits.  Take time out each month to analyse your business.  Look at your accounts to see what money is being spent and what costs could be reduced.  Keep a note of mistakes and review them periodically and also jot down ideas for improvements as they arise.

  1. Use your time more effectively

As the old cliché goes; time is money – or the potential to make money. The more time you waste on inefficient activities, the less time you have free to spend doing productive tasks that could help your business grow.

Michael Gerber, in his world-famous book ‘The E-myth revisited – Why most small businesses fail and what to do about it’, stresses that one of the reasons businesses fail is that the owners spend too much time on day-to-day tasks.

So if you are a small business owner, it’s vitally important to spend the time to steer your ship in the right direction. Take time to step back from the day to day tasks and spend time thinking about your strategy and the bigger picture.

One of the most common ways our customers improve their time efficiency is by understanding and using the latest technology. There is lots of software available now to help schedule your time better, manage your workers and make information more readily accessible.   However, be careful not to get sucked into the latest trends.  Software can be fashionable with new software coming and going at a rapid pace.  Ensure the software is right for your business, ensure your staff are comfortable with it and ultimately ensure that any software that you use adds to your profit rather than simply taking up time and costs.

  1. Help your employees do their jobs better

This tip is particularly important if your employees are out in the field. If you can’t assign jobs to staff and relay information to them easily, they could miss out on opportunities to finish jobs quickly. This could result in you taking on fewer jobs overall, meaning you’ll make less profit.

Using software can empower your employees by putting key information into the palm of their hands.  It can help them make decisions in the field without having to call the office.

Be careful to ensure that your employees don’t feel isolated. Keep them in the loop with company developments and ensure there is time for colleagues to get together.

  1. Ask your employees how you can improve

Have you ever been working for a company and thought “our company could save so much money if our managers only asked us for input”?

The fact is, directors of a lot of companies never think to ask lower-level employees for help. Your employees do the same job every single day, so there’s a chance they know their corner of the business better than you do. Why not ask them if they have any ideas on how you could save money or improve your service?

  1. Don’t give your customers a reason to go elsewhere

It may not always be possible to give a flawless service to your customers.  We’re all human and sometimes mistakes get made.  However, at the very least, you should strive to do a better job than your competitors. It’s always good to monitor the competition, see what they are doing well and learn from them.  Even if you feel you’re already doing better, it’s worth asking yourself a couple of times a year, “if a competing company opened tomorrow, would I have any reason to be worried?”

One of the best ways to retain your regular orders is through giving good customer service. If you don’t, it could cost you – a 2013 study showed that UK businesses lose £12billion a year through poor customer service.

 

By Richard Harris, director, Okappy