It’s not just about simplicity or even streamlining, there is a more fundamental reason to get systems sorted. When you are a business still run by you, its founder, an exit strategy will eventually be on the agenda. And if that includes selling the business, then everything needs to be absolutely clear. When a business has too great a reliance on a few staff, a few customers or a few suppliers, it is not attractive when it comes to a sale, business buyers want a going concern.
Suppliers and customers also need the reassurance that comes with knowing the managers have their fingers on the pulse of product production and associated process. If the way things are done becomes more streamlined, then waste, and costs, are reduced. Which is why small businesses are forever seeking ways to improve.
When your products and services are better, then your sales, market share and margins will also improve. The impact of both is greater profitability. The first step in improving the quality of products and processes is to establish just what needs to be done, where the weaknesses are and where there is room for improvement.
Automating processes is your basic starting point for your small business when looking to add value to your core offering. Ensuring accounting, stock, invoicing and other back-office functions are smooth, reliable and efficient allows your business to focus more on being the flexible and responsive unit which, for a small business, is probably your biggest attraction for many of your customers.
Figuring out how to make your business leaner and more productive demands a continuous improvement mindset (a way of looking at your business every day and seeking opportunities to do things better, smarter and more efficiently). While you may not be able to control external factors like the exchange rate or the price of oil, you can always keep fine-tuning your operations.
To see where you can make your business more efficient, you first have to take a step back and look at what you’re doing. Yes, this can feel like you’re taking time away from other important things, but the perspective you get from that pause will pay off down the road. Take the time to really look at your systems and gauge which are working well and which aren’t.
Your people are directly in touch with how things work in your business. So make the effort to visit them in their work environments and ask for their take on operations. Never underestimate the wealth of knowledge they have to share. Businesses that are open to suggestion and want to engage their employees tend to get the most benefit out of their continuous improvement initiatives. It’s why respect for people is key to a continuous improvement culture.
Don’t start by trying to save a million rands overnight. Small, incremental changes can give you quick wins, without disrupting your operations or demanding a huge amount of effort. If you can shave five minutes off a process or cut a product cost by a few rands, that will deliver long-term gains. Once you’ve found your first quick win, start looking for the next one right away. A long-term commitment to continuous improvement will help you respond to growth and change, and keep your competitive edge sharp.
This is where you turn the dog-tail chasing into an upward spiral of profits. You know your processes, you’re measuring them accurately and you’re asking questions. Are you getting better in terms of speed, profit margins, safety or any other critical measures? If not, why not? Who knows the bottlenecks intimately and could suggest improvements? What new technology or approach might strengthen a weak link?
Continuous improvement leads to quality improvements, service enhancements, cost reductions, and productivity increases of your business activity or process. Your business should embark on a continuous improvement program in an effort to improve your operational performance and drive competitive advantage in the marketplace. Constantly seeking to improve, both the quality of products and processes, should form part of your growing business’s DNA.