How to Maximize Your Business Efficiency (and Improve Your Profits)
If you’re like most business owners, your focus is probably on bringing in revenue. After all, revenue is the life-blood of your company. The more revenue coming in – the more profits your company will show, and that’s a good thing.
But it takes more than an eye to revenue to succeed. Even if you bring in very high revenues, if the revenues come with high expenditures attached, you’ll find that your business is not sustainable over the long haul. Remember that PROFIT = REVENUE – EXPENSES. This means that there are two ways to enhance profits: (1) increase revenue in cost effective ways; and, (2) decrease expenses.
While you probably have a long list of expenses that come out of your revenue to reduce your profit – everything from office rent to advertising; from employee benefits to toner for your copier – for purposes of this article, we’re going to focus on how efficiency (or the lack of it) can affect your profits, and what you can do to improve it.
Defining Efficiency for Your Business
While efficiency may be defined as the measurable avoidance of wasting materials, energy, efforts, money, and time in doing something or in producing a desired result, when we factor in effectiveness, the definition takes on a new tone: Efficiency is the ability to do things well, successfully, and without waste.
"Doing things well, successfully, and without waste” does NOT mean cutting corners. Nor, to paraphrase Peter Drucker, does it mean “doing efficiently that which should not be done at all."
Any measurement of efficiency must include effectiveness, therefore not all businesses will measure efficiency in the same manner. What's effective for one business will not necessarily be effective for another. Businesses must do the right things the right way to successfully produce the desired results, which in business means maximizing profitability.
So, what’s a CEO to do in order to ensure that his operation is as efficient, effective and as profitable as it can be?
Steps You Can Take toward Effective, Efficient and Profitable Operations
Take advantage of technology.Today’s technology makes it easier than ever to complete more tasks in less time. Take advantage of what technology has to offer. From Electronic Content Management capabilities to automated workflows, and Artificial Intelligence; from mobile devices and apps to social media marketing and sales – embrace and encourage new capabilities, new trends, devices, and software as they appear. Empower your workers to be both efficient and effective (and your company more profitable).
Provide anytime, anyplace access to workplace data.Neither time of day (or night) nor geographic location should prevent workers from accessing the data they need to do their jobs. There are many data management systems and apps that enable access via an internet connection. So, the airport waiting area or the local Starbucks can become an extension of your office where work can be done. Employees are more efficient and more effective when they have a secure, reliable way to collaborate, communicate, and respond to change.
Use MetricsWhen you measure not only the efficiency, but also the effectiveness, of what you’re doing, you can make better decisions about what’s contributing positively to your bottom line. The golden rule for a successful business is to do more of what works and do it better and stop doing what doesn’t work. You won’t know what works if you don’t measure the results of what you’re doing. Thankfully, today’s ECM, AI and workflow technologies enable automated ways that you can “keep track,” and most provide management-level overviews for quick reference.
Look at the big pictureFortunately, even many cost-conscious business owners have begun to look at new technology as more than an “expense.” Today's technologically savvy business owners know they most focus beyond the initial technology expenditure to the ROI that the new efficiencies bring to their businesses. Indeed many understand that they can eliminate the capital expenditure entirely with Software as a Service (SaaS) solutions for content management, workflow and AI. SaaS can be a fast, low cost, minimal obligation way to sample the technology in your business to make sure it brings the desired effect.
Have effectiveness goalsBefore you embark on a new pathway to efficiency, make sure you know what the ultimate effect is that you hope to achieve. Make the goal specific and measurable. Track, measure and review, frequently at first, to ensure that the desired results are being produced. Tweak your goals and/or your efficiencies as required.
Efficiency and effectiveness are not the same, but it’s easier to be effective when you’re efficient. One great place to start is by eliminating the unnecessary flow of paper through your organization. From forms processing and A/P processing to mailroom solutions and a paperless office, Paper Alternative Solutions makes efficiency (and effectiveness) happen for businesses, government agencies and other paper-intense organizations. Contact us to learn more.