What do we mean when we say,“business efficiency”? In short, it is the maximisation of output (or results) achieved from the level of input invested. You can measure business efficiency in a number of ways, and which one is right for your business will depend on factors such as the type of business, your key business drivers, your current targets, and your paint points.
In this blog, we unpack how you can analyse your inputs, systems, and processes by asking yourself the right questions. But first, let’s have a quick look at what business efficiency comprises and why it is the key aspect of business success.
Every business involves:
They key is to get the maximum output with the minimum input. This is what brings you the money and frees up your valuable time to spend with your family, enjoy your hobbies, go on more holidays, or engage in professional development and explore new strategies for your personal and business success.
Sounds like a dream? It sure does, and the process of converting inputs to outputs is tricky and time consuming. This is where a lot of wastage often occurs and business efficiency is at risk of becoming minimal or non-existent. How do you know what it is at risk?
Questions to ask yourself and your leadership team:
- Is our staff working efficiently?
- How many coffees do they haveper hour?
- How many pallets do they unpack, sort, and put back into shelving in a day?
- How many cars gets serviced in our workshop?
- Do you know if your staff are working at full capacity? How do you know that?
Remember, your business and your employees may feel “busy” and you may be thinking that you need another staff member to help with the work load; however, “busy” does not mean “productive”! Always analyse what “busy” means by asking the following:
- Are your employees doing the right tasks?
- Can what they are doing be done in half the time?
- Can your staff efficiency increase simply by changing the processes around how they work vs adding an extra person (and a wage!)
Often, the problem is labourefficiency and the right solution is not to hire a new staff member. For example, if your floor personnel are only working at 60% of their usual productivity rate, why do you need to hire another person to deal with only 10 booked car services? When staff don’t do the right things, progress with tasks too slowly, make too many errors, etc., you have a business efficiency problem, resulting in less.
If any of this sounds like your business’ pain point, do not delay in speaking to your business advisor.Your systems and processes play a key role in how efficiently your business runs and need to be questioned regularly, often with help.
- Do employees know what to do and when?
- Do you provide sufficient staff training and support to ensure tasks and decisions don’t get stalled?
- Is everyone aware of the entire process of creating the final product or service?
- Is this process clearly documented and can be easily replicated/followed if an employee in charge is unable to implement the tasks required due to some unexpected circumstances?
Remember that your employees maybe busy as bees, but if they are doing the wrong tasks the wrong way and at the wrong time, your business efficiency (and worth!) is reduced significantly.
Identifying what works in favor or against your business efficiency is key. Then, it’s time to face the truth (and don’t worry if its ugly) and measure the results! Remember that “what gets measured, gets managed [and improved!]”
Always set clear and measurable goals and know your KPIs (key performance indicators). Each business’ KPIs are unique and must align with its business strategy and goals to be successful. It’s true that some companies set KPIs that can make or break their success. Making sure you measure the right things is not always easy, and that’s where a trusted business advisor can help.
At Hoffman Kelly, we bring the right people to the table who understand your business and can unpack its key issues. We will identify actual problems and offer real, actionable solutions.
Give us a call at 07 33942311 or click here (link or something) to book your first no obligation initial consultation.