How to Help Streamline Operational Processes and Procedures
During a time of economic struggle, it’s important for businesses to do everything possible to help cut expenses so they can optimize their cash flow and stay profitable.
One way to do this is to review how you operate your business, looking out for inefficiencies and disconnects that cost you money, then fixing them.
Here are some proven ways to streamline your operations so you can work to reduce expenses:
Review Your Processes
Start by reviewing all of the processes and tasks that are required to do the work that takes place within your organization, one by one. Then, look at how they all link together. Work with your team to challenge the process and look for ways that it can be improved or where steps can be eliminated. Look at each process or task and determine if it is necessary or adds any value to your business. If there is no value added by the process or task, it’s time to make changes. Also look for redundancies and disconnects in the overall flow. Cut out things you’re doing more than once with no benefit. When you focus on your processes and really challenge them, you may be surprised by the number of opportunities you have.
Example: The first thing the morning crew at your restaurant does is take inventory of supplies in the kitchen. The issue: The process is similar to what the late crew does before they leave at night. This only comes to light when the morning and night processes are lined up side by side and you review them together. Eliminating the redundant tasks can help save time and reduce costs.
Automate Repetitive Tasks
People who do the same things for a long time get used to doing them in the same way even if, over time, the value of the work is lost. In some cases, the busy work may provide a sense of job security, so they may not be willing to admit that the work they’re doing provides little bottom-line value. As you review your process chain, ask questions. Look for opportunities to automate repetitive tasks. The initial setup for automation could be expensive, but it may pay off over the long term.
Example: Do your employees apply branded labels to the things you sell? It may have made sense to do it by hand when your business was just starting out, but does it still make sense to handle it this way now that your business is larger? Exploring options to have machines affix the labels, or to have them printed directly on products, could save time and free up staff resources for more valuable tasks.
Are there sections of your process chain where you have bottlenecks? These are places where things slow down because of a workflow issue. This typically happens when there aren’t adequate resources to keep things moving at the same speed. It could be due to a lack of staffing, materials or information. It could also be the result of technical breakdowns or inadequate equipment or training.
Example: You own a chocolate factory. Producing the chocolates is a highly efficient process, but wrapping and packaging them is much slower than your ability to make them. It turns out that the team isn’t adequately trained to wrap and package the candy. Increasing the number of people doing this task and giving them the necessary training to get the job done may help raise your operational efficiency to a higher level. Weak links in the production process like this can cost companies.
Often, operational inefficiencies can result when one person or process passes information to another person or process. Every time this happens, there’s the risk of a slowdown in information flow or errors.
Whenever possible, look for ways to automate the flow of data and information, eliminating the human factor whenever possible. It can go a long way to increasing efficiency and helping prevent costly mistakes.
Example: Your business receives a list of transactions from a clearing house every day. While analyzing your process chain, you discover that the person who handles this task prints out the report and keys the information into your proprietary systems. This takes a significant amount of time and effort and may lead to data entry errors. Automating this process could save countless hours and help to prevent avoidable errors.
Outsource When it Makes Sense
In smaller operations, business owners may think that outsourcing is only for bigger companies. In today’s work world, outsourcing is a viable option for almost every business.
- Are there other companies who specialize in tasks that create a talent or staffing solution for you?
- Do other companies produce parts that are of a higher quality and less costly than those you make for yourself?
- Are your employees more skilled at certain tasks and frustrated with more basic work?
As you go through your process chain, look for inefficiencies. Consider the option of outsourcing some of the inefficient or repetitive work currently being done, and reassign experienced employees to work that requires higher skill and effort. This could help you reduce costs and improve efficiencies now and over the long term.
Example: You own a small financial planning business. You receive several reports every month from the investment firms you work with that need to be compiled, repackaged and sent out to your clients. This is a time-consuming task that distracts your employees from other work about 10 days every month.
You go online and find a part-time virtual worker who can handle this task for you. You only have to pay them for the task you need to get done and they are able to complete the work in a more timely fashion, freeing your employees to do more work that requires more experience.
Many business owners think the only way to make it through a challenging time is by pushing ahead with the status quo, doing everything possible to increase sales to maximize revenue. When in reality, you may be able to add the same amount to your bottom line, or more, by streamlining your operations.
Learn more about streamlining operations as you reopen in our Business Reopening Playbook.
Prepare & Prevent
Finding the right product and service offerings is key in making it through a recession. Learn more about which new products and services you should be selling.
Protecting new businesses during COVID-19 can be challenging for business owners. Learn how to help protect your new small business during this uncertain time.