If there’s one positive that came out of the Covid-19 pandemic, it’s that it forced small business owners to reevaluate the essential functions of their businesses. Everything from supply chain to inventory management to marketing, even the products and services themselves, had to be optimized in response to lower revenues, lockdowns and other public safety measures.
Business efficiency is always an area of concern for small business owners, but the sudden drop in revenue that many businesses suffered has forced owners to find even more ways to stretch every dollar they spend and ensure there are no wasted movements in their operations.
Making your business as efficient as possible is a job that is never complete as you must constantly reevaluate systems, workflows and processes. Keep reading for tips to help your business become more efficient and productive.
Know Precisely Where You Stand Financially
Financial statements are to businesses what x-ray are to people. But more than telling you the financial health of your business, statements like a balance sheet can give you a high-level look at your business efficiency and help you make financial and strategic decisions.
Using an accredited business accountant will ensure your records and financial statements are accurate and provide you with expert advice and insights based on your business practices, industry, needs, goals and financial standing.
Automate Repetitive Tasks
Most businesses have some aspect of their operations that require repetitive tasks such as invoicing, scheduling or data entry. Completing them manually is an inefficient use of money and labour and fixing inevitable mistakes means more lost time and wages.
Investing in solutions that automate these tasks saves you money over time, completes the tasks faster and with fewer errors and frees up your team to concentrate on tasks that improve your bottom line.
Shore Up Your Supply Chain
As many business owners found out the hard way thanks to COVID-19, supply chain disruptions can result in lost sales, angry customers, refunds, financial penalties and other fallout that can harm your business.
If you weren’t already forced to, look for ways to strengthen your supply chain that make sense for your business. Options include sourcing more readily-available substitutes, paying higher prices to a local supplier, using multiple suppliers or moving production in-house.
Focus on Getting Paid
You need to get paid as quickly as possible to maximize your business’s efficiency. Higher cash flow means paying less interest on borrowed money, taking advantage of early payment discounts, and avoiding late payment fees.
Look at all your revenue streams for inefficiencies, like inconvenient purchase or payment options, confusing or inaccurate invoices or disorganized accounts receivable procedures that delay payments.
Suggestions to reduce the time it takes your business to get paid include:
- Optimizing your website for quick, convenient and secure purchasing.
- Standardizing your invoicing process.
- Invoicing immediately and ensuring invoices are clear and easy to understand.
- Offering multiple payment options.
Consolidate or Refinance Your Debt
Paying higher interest adds to your expenses and reduces business efficiency. If you’ve been managing your debt correctly, your credit score may have improved since you last borrowed money. Keep an eye out for lower-interest alternatives to your current credit products. Even a reduction in the interest on a car loan helps.