Are you a business owner or managing director? There are many perks to running your own business, including serious earning potential far beyond what you could earn as a salaried professional. However, with these perks comes additional stress because your success depends on your performance and how the business runs. Another benefit is that running a business can mean focusing on what is truly important to you, such as providing an exemplary service or selling valuable goods to consumers who need them for various purposes. In addition, you can employ staff, giving other people some stable employment, good earnings and a sense of meaning and purpose in their lives.
However, with all this comes many challenges, such as business efficiency issues that can hamstring your operations. This helpful article will cover the six biggest business efficiency challenges and how you can solve them.
1. Inefficient Projects
If your business suffers from inefficient projects, consider project management courses online for your project managers or staff. Projects that run over time and fail to deliver what they intend to can be a significant headache. For one, you are faced with a delay in the project deadline, which is never fun to explain to clients or customers, no matter the industry. And two, a project blowout can mean massive cost overruns, costing you some significant profit. By upskilling your project staff with online learning, you can reign in some of these delays and budget blowouts and save money and your business reputation.
2. A Lack of Vision or Direction
Businesses, while functioning daily and bringing in revenue, also need a longer-term strategy, vision or direction. A lack of this can be a severe inefficiency that could even tank your company. Competitors with a clear direction and vision will forge ahead, leaving you in their wake.
Some examples of significant players lacking foresight and vision include Kodak, who passed on the change to release the first ever digital camera; Toys R Us, who failed to read the writing on the wall that was declining sales and a shift to online entertainment, and Blockbuster, who went under with the advent of streaming television.
The way to solve this issue is always to have a long-term vision and direction that you can envision your company taking and making critical decisions to steer the ship towards the vision.
Along the way, continue to innovate, expand and grow without losing sight of the endgame.
In-House Payroll and Bookkeeping
Paying staff and bookkeeping are time-consuming, tedious tasks that create significant inefficiencies in your business. However, they are essential as you need to pay your staff and keep the books for your taxation obligations.
You need to pay your staff accurately, factoring in their hours worked, contracts and other pay aspects. It’s easy to make mistakes during a pay run, and nothing will upset your staff more than a pay error or late payment of wages. Mistakes can be a drama to fix and could even cost you otherwise loyal staff who may look elsewhere for employment if there is an issue with their pay.
By outsourcing your payroll to a specialist company, you can rest easy, knowing that this complex task is in the hands of a dedicated team that will manage all your ins and outs. You’ve created efficiency and can now redirect efforts to strategy, growth or marketing.
The same applies to your bookkeeping; even with software solutions, tracking income, expenses, purchases, and write-offs can take time and work. It is worth considering outsourcing your books to a dedicated accounting firm. Many can offer accounting and bookkeeping services, with a full suite of services tailored to your business.
There is a cost to both these things, but outsourcing will create seamless efficiency in your business.
Hiring and Onboarding New Staff
As your business grows and you scale up, you must recruit new talent to fill vacancies and perform necessary business functions. From sales to marketing to financial analysis and customer service, you need people in seats to keep the machine running. Your teams can be equally responsible for your success as your contributions and work in the business.
However, hiring and onboarding new staff can be massively inefficient. It often costs more to recruit, train and orient a new staff member than to promote an existing team member to a new role. You need to pay for job ads, review applications and interview potential candidates, which can take two to three weeks. Then, you’ll have a few weeks where the new addition to your business is getting up to speed and learning their role, all without creating any revenue or value for the business.
To solve this inefficiency, you can do a few things. You can use an HR/hiring software platform that can streamline your recruitment, shortlisting and interview process. This eliminates the need for an in-house recruiter or HR team. Then, when they are onboarded, you can invest in online orientation learning systems that will speed up their learning process. Or, buddy them up with an experienced team member who can quickly mentor them in performing their role.
Customer Retention and Return Business
Getting a new customer or client costs money. You must pay for advertising, marketing, SEO, and social media management. Even if a customer or client has a massive return on investment, throwing money at trying to funnel new sales or customers for your business can be inefficient.
Instead, you can focus on customer retention and repeat business to create a steady income flow. How you do this will depend on what products or services you offer. For instance, if you install heating and cooling systems, this might not be an effective strategy. However, if you sell products that people need to buy often, it can be worth investing in. You can consider strategies like customer loyalty, points rewards systems, and targeted email or SMS marketing. If you can entice someone back a second or third time, you’ll create brand loyalty and perhaps snare a customer for life.
Lack of Automation
How many of your business systems and processes rely on manual work, data entry or other inefficient methods? Your daily operations can continuously be optimized and made efficient. Reducing administrative overhead and manual work can free up your teams for more critical work.
Take the logistics and postal sector as an example, with automated tracking, GPS devices and delivery predictions and updates. So much of this is automated with software. See what you can automate and streamline with technology or software and create efficiencies in your business operations.
An Efficiency Summary
This helpful article has shared the six biggest business efficiency challenges and how you can solve them for your enterprise.
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