As business owners, we strive to work SMARTER, perform BETTER, and be more EFFICIENT.
Why? Because there are only 24 hours in a day – it’s that simple! But just how productive can we be in a day? What income can we reasonably expect to generate? Productivity and income are not finite and they certainly don’t increase just by putting in more effort.
Where does our inefficiency come from?
Time, cost and quality are the three dimensions of business, and if we don’t manage them carefully, they could easily be stripping $50,000, $100,000 or even more from the bottom line profit of your business each year. Ask yourself – in these three areas: how does our inefficiency waste time, cost us money and reduce the quality of the products or services we deliver?
Take a look at the examples below and see if you can’t recognise something of your own business in them.
Micro-managing others
Think about every time you, as a business owner or manager, assist a member of your team to complete a task when you don’t really need to – assisting a $25 per hour resource to complete a $25 an hour task, and when your hourly rate is $200 per hour… You’ve just cost the business $225 to perform this $25 per hour task!
Not allowing adequate time to follow up leads, quotes, and business opportunities.
How many of these are you not converting to sales when you know you could convert them with just a little more focus? What are these missed conversions costing you? And it’s even worse if you’re spending time preparing quotes outside your “normal” working hours.
Lack of consistency by your team in providing services.
Resulting in having to redo tasks – for FREE (i.e. at your cost). Are you checking things yourself to complete a job? Have you provided sufficient induction and training for your team so they know why, what, how, and when to perform their tasks?
Improving Efficiency
Follow these five simple steps and you will achieve greater efficiency, better productivity and communication in your team, and get back some of that lost revenue:
Step 1: What is my Cost of Inefficiency? Invest 30 minutes or so to consider how well you manage time, cost, and quality. How is your inefficiency impacting your business? Calculate your cost of inefficiency for an average week, and then multiply by 50 to give a year. You will be shocked, but at least you’ll know your Cost of Inefficiency! Knowing that, decide just how much of your hard-earned cash you are prepared to lose. Then make a decision.
Step 2: Plan your new, systems-focused business. Now that you’ve identified the cause of the pain, plan the necessary actions to ensure that effective systems will change the future of your business. Commit to setting aside time, resources, and set a target date.
Complete these first two steps now! and look out for the next steps in our following articles.
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We love helping small businesses. If we can help you, contact us! Call Elke on 0410 819 783 or email contact@miebs.com.au.
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