There are two ways to increase the profits of your business: grow your sales or improve your production. While you can't always increase your number of customers or what they buy, you can take steps to improve your business operations to get more for your investment. Taking steps to complete projects faster and for less cost can free up resources and expand your profit margin. Follow these nine steps to audit your business processes.
1. Review Your Day-to-Day Operations
The first way to improve your processes is to consider your current operations. Where does time get wasted on projects? What miscommunications lead to mistakes? You can crowdsource ideas by asking employees to share ways they could do their jobs faster or better and then work to remove those roadblocks. A few minutes saved each day adds up, especially for every employee across the company.
2. Review Your Business Plan
If you have been in business for a few years, it may be time to review your business plan. This plan dictates how your company will operate, what it will create, and how you will measure its success. Some companies can use the same business plan for years, while others need to make changes as their business grows.
Take what you have learned since you first opened your doors and apply that critical eye to your business plan. What mistakes have you made and overcome? What improvements have you implemented? Use these lessons to update your plan so you can use it in the future.
3. Get Feedback From Your Existing Customers
If you're not sure how to improve your business, then your customers will be more than willing to tell you. Reach out to new customers and loyal buyers alike and ask for ideas to improve your business. This could include product improvements, updates to your sales process, and changes to your website. Not only will your customers give you clear, objective feedback, they will also appreciate being listened to. When your customers see the changes you make based on their ideas, their loyalty will increase and help grow your sales in the future.
4. Evaluate Your Pricing
Every few years, consider your pricing model and the costs you set out for your current products or services. If your prices are outdated with those in your industry, then you could be limiting how much money you make.
Additionally, customers evolve with trends and new pricing models. For example, subscription services are incredibly popular now, where customers pay a monthly fee for a service instead of buying items a la carte. It may be time to update how you sell your items, along with the prices you charge for them.
5. Identify Areas To Improve
While there may be some minor tasks that can be optimized within your organization, there are also likely some areas that could use major improvement. This could be from an understaffed team that is suffering from burnout or a department that lacks the right tools for the job. Try to triage the most pressing areas for improvement. Work on the departments where improvements will have a significant impact on your business operations. Once you reap these benefits, you will want to find other ways to improve your workflow.
6. Explore New Markets
Business is all about adapting to change. Updating your pricing and operations can streamline how you work, but it may be time for something more significant. To a deep dive into your industry and consider the markets you reach. Are there any untapped customers who would want your products? Could you pivot your marketing to reach these customers?
Reaching a new market can help grow your total number of customers, but it can also grow your sales. Some demographics spend more than others and reaching a high-spending demographic can boost your sales even if you maintain the same number of customers.
7. Resolve Small Issues
Along with tackling big problems, create a process to resolve small issues before they grow out of hand. Small problems can easily get ignored until they reach a point where management needs to get involved. You might not realize that two employees are disagreeing with each other until one threatens to quit. By this point, the escalation is so serious that the problems will take more time and resources to solve. Try to improve your communication channels and conflict resolution so you can catch small problems early on.
8. Keep Up With Trends
The business world is constantly evolving — are you? Trends within the workplace and outside of your office continue to change, leading to new ways to work and new products. For example, more than five percent of American employees work from home, a number that has grown significantly over the past few years. Companies offer work from home options as a hiring perk to recruit top employees. If your company isn't aware of this trend or hasn't even considered it, then you're falling behind.
Failing to keep up with trends can hurt your external market share as well. If customers don't use your products anymore or are moving to different service options, then you could end up chasing after them instead of maintaining their business. This creates a serious threat to your future profits.
9. Inspire Your Employees
Motivated employees are productive employees. If your team members are disengaged, then they aren't going to put out their best work or try to finish their tasks efficiently. Take steps to recognize the hard work of your staff members and show your appreciation. Then focus on the “why” of why they do their jobs in order to motivate them. This can re-engage your staff to put out their best work.
Taking steps to optimize your business operation is part of a long-term ongoing process. There will always be ways to improve and it takes time to process updates to take effect within your team. These steps aren't easy, but they are important. If your business keeps marching toward improvement, your business will continue to be healthy.