Spend Matters welcomes a new guest post from Howard Lea of Staples Industrial.
Small businesses tend to operate closer to the margin, meaning that waste and repetitive workloads can quite literally affect a business' bottom line. That's why, from startups to neighborhood mom-and-pop shops, efficiency is key to maintaining a healthy small business.
How can you keep your small business as lean as possible? Let's take a look at a few key ways to do just that.
Know when it's time to outsource
Though outsourcing isn't a solution for everything, sending off work that falls outside of your business' immediate area of expertise, or is otherwise tedious, can save money, time and brainpower for the aspects of your business that require your true talents and expertise. Human resources and bookkeeping are great candidates, as little on-site work is needed. Even everyday administration can be sent to a virtual assistant, who can work on his or her own or in conjunction with an in-office receptionist.
To determine good roles or work for outsourcing, do an inventory of all of the tasks your business accomplishes on a daily, weekly and monthly basis. Then evaluate which ones can be easily accomplished elsewhere.
Streamline your supply chain
If you've been in business for a few years, you probably have relationships with regular suppliers. This is a good thing when it means trust and reliability. But even the best relationships tend to stagnate, and if your supplier isn't adjusting with the ever shifting economy, then you may not be getting the best deals. In fact, some long term suppliers will use your history together as an excuse to raise prices.
Accordingly, it makes sense to do an annual or even quarterly review of the prices you're receiving from your suppliers, as well as an evaluation of your supply chain as a whole. You might uncover inefficiency in the way you order items only on an as-needed basis, creating delays that can turn customers away. Then you might instead decide to create an ordering calendar and turn to a wholesale provider for bulk savings. At every step along your supply chain, investigate similar solutions for making it shorter.
Invest in new technology
Sure, shiny new technology is fun to play with, but it can also promote productivity. Faster computers with faster internet connections will speed the pace of business, as will mobile devices that will help you and your staff embrace the cloud and get work done whether in the office or on the road (no more excuses!). If you're using an Excel spreadsheet to do your accounting, investing in tools like Quickbooks or Xero will decrease financial headaches both on a daily and long-term basis (and your accountant will thank you). Just like outsourcing, new technology will get you through your everyday tasks more quickly and keep you focused on the work that really matters.
In short, efficiency is well within the reach of any business. Locate the jams in your workflow, and do a little experimentation to find new processes that are right for you.