Each day presents a new opportunity to strengthen your business operations and move your company forward. It can be tough to know where to concentrate your energy. Our guide to improving business operations can help you formulate a plan and work toward a stronger future for your enterprise.
What are business operations?
Business operations comprise all actions taken to keep your company functioning and earning revenue. Business operation plans cover all equipment, labor, and company infrastructure needed for employees to effectively carry out your company’s daily tasks.
The importance of effective business operations
Effective business operations maximize efficiency and streamline communication. Put another way, without effective operations, inefficient workflows and poor communication inevitably become part of your business practices. Both these business traits are correlated with higher chances of business failure.
How to improve business operations
Now that you’re familiar with business operations, here are 19 easy ways you can improve your business operations the smart way.
1. Plan Your Day
As Benjamin Franklin stated: “By failing to prepare, you are preparing to fail.” Don’t just jump into your day. Take time each morning to prepare a list of tasks and projects that need your attention, set a few short-term goals, and look ahead.
2. Review Your Business Plan
A business plan is a formal statement of your business goals, reasons they are attainable, and strategies for reaching them. Many entrepreneurs put a lot of care into creating a comprehensive business plan when launching their company. Then that plan gets filed away, never to be seen again. Make your business plan a living document that works for you. Review it regularly and revise as market conditions change to help keep you on track, energized, and ready for growth.
Need help crafting a plan that works for you? Check out this guide from the SmartBiz Small Business Blog: How to Write a Business Plan for Your Small Business (Without Going to Business School).
3. Clearly Define Business Goals and Objectives
When you set realistic business goals and objectives, you can more easily measure your business success, establish employee expectations, and figure out your future ambitions. As such, meaningful goals in and of themselves improve business operations.
Need some inspiration for developing smart business goals? Here are some pointers from the SmartBiz Small Business Blog: Setting Business Goals: A Comprehensive Guide
4. Get in Touch with Existing Customers
Nurture your current customer relationships through newsletters, social media, and other ways you can keep your brand top-of-mind. According to Bain researchers, increasing customer retention by just 5% can boost profits by as much as 25%–95%. Don’t forget to have a system in place to monitor customer reviews. Check Yelp, Facebook, Google and other places your business is mentioned so you can solve problems quickly and thank loyal customers for their business.
5. Evaluate Pricing
Pricing products as been described as “part art and part science”. Get pricing right, and you’ll be in good shape to increase sales and build a loyal customer base. Get it wrong, and your entire operation can be at risk. Inc. has a comprehensive article to help guide you as you evaluate your overall pricing structure: How to Price Your Products. It’s always a good idea to have a financial professional help you crunch the numbers.
6. List Areas You Want to Improve
Entrepreneurs are a diverse bunch with a wide variety of skill sets. You probably know your strengths, but have you considered focusing on areas where you could improve? You might want to adjust your billing and collection process or implement a better record keeping system. Don’t ignore personal areas where you could improve. You could take a local college course on public speaking to help you network or brush up on new social media strategies via an online class. Make a list, prioritize, and set realistic deadlines so you don’t get overwhelmed.
7. Explore New Markets
If you’re looking for higher sales and greater visibility, it might be a good time to explore new markets. This is a big step, so make sure this move is consistent with your overall business plan and that you have the time and resources to devote to new market research and development. You don’t want to spread yourself or your resources too thin and put the business you have at risk.
8. Improve Marketing
Marketing is all about developing your brand and demand for your product. If you’ve been focused on just making the sale, you could be missing out on new customers. Explore low-cost ways to improve your marketing efforts. Take a look at new social media strategies, consider content marketing, and refresh your website. Check out these easy-to-digest articles with lots of great marketing ideas you can easily implement:
9. Resolve Small Issues
Little glitches and things that aren’t quite streamlined can cause more harm than you think. As a small business owner, you need to be aware of small problems and weak spots that can affect your bottom line. Reach out to your team and hold a brainstorming session to identify and solve issues that are slowing down or compromising work.
10. Keep Up with Trends
Don’t get left behind! Subscribe to newsletters and podcasts that cover your industry, keep up with the local and national economy, and stay on top of new laws that might affect your business operations. Perform a competitive analysis regularly so you know what others in your field are up to.
11. Inspire Employees
Today's workforce spends a lot of time at work. In fact, a recent labor study found that the average employee spends 30 percent of their time at work or at work-related events and activities. As an employer, you want to make sure your team knows you care about their well-being. The SmartBiz Blog has resources to help you develop an employee friendly culture:
- 15 Original Employee Recognition Ideas
- Stressed Employees? 6 Tips to Help Lighten the Burden
- Strategies to Retain Your Small Business Employees
12. Improve Your Relationship with Customers
When your company improves its customer service, you can spend less time seeking new customers and instead focus on encouraging existing customers to return time and again. Doing so costs less than new customer acquisition and helps you establish a strong base of eager customers who may provide positive reviews, sign up for email communications, or participate in your loyalty program.
13. Implement Cost-Cutting Initiatives
A surefire way to increase your profit is to decrease your costs, and numerous methods exist for doing so. Examples include dropping non-essential perks such as holiday parties, minimizing liaison-only positions, and not conducting more than one analysis of the same event.
Some of these initiatives directly reduce spending, whereas others indirectly lower your costs by affording your employees more time to work – and time, as they say, is money. The Harvard Business Review lists several direct and indirect cost-cutting ideas: When You’ve Got to Cut Costs—Now.
14. Leverage Business Intelligence
If you’ve ever used the data obtained from an ad campaign or survey to inform future business decisions, then you’ve leveraged your business intelligence (BI). This term encompasses all data visualization, analytics, and tools that can track performance, assist in competitor research, or otherwise optimize your operations. As such, BI is a conduit to achieving many of the other business improvement ideas in this list.
15. Streamline and Simplify
A streamlined, simplified business model inherently cuts costs. Think about it in terms of a traditional supply chain: Between you and your vendors may be several middlemen, each of whom imposes a fee.
Although you’ll normally pass these costs to your customers, there are other ways that reducing the number of middlemen in your supply chain saves you money. With fewer middlemen fees, you can charge less for your products and services and thus attract more customers. Alternatively, you can keep the prices the same as with middlemen and reap more of the profits.
16. Measure Performance
Whether through financial statements, customer surveys and reviews, or employee reviews, measuring performance through key performance indicators (KPIs) is key to learning how you can improve your business operations. Financial statements can clarify where you’re overspending, customer surveys and reviews can demonstrate the unmet needs of the people who buy from you, and employee reviews can identify workflow inefficiencies.
Of course, you shouldn’t stop at these observations. You should also put plans together for addressing any gaps you identify. With a firm course of action, you can work toward the business success you’re seeking.
17. Set Aside Time to Reflect
Despite the common notion that business success means working tirelessly around the clock, many of the world’s most successful entrepreneurs regularly schedule time just to reflect. This means staying home from the office, cutting back on tasks, and setting goals for your thinking time. Try answering prompts that successful entrepreneurs have used to generate new ideas and solutions to old problems.
18. Hire the Right People
Terminating a poorly performing employee is far from a squeaky-clean reset. In reality, it’s a large monetary loss that can push you closer to business failure.
According to one analysis, the average amount of money that a small business spends to hire a new employee is $240,000. Beyond hiring costs, your business loses money when employees are frequently absent, unable to work independently, or poorly fit your company culture. By hiring the right people from the jump, you can easily improve your business operations – or, more accurately, prevent operational struggles in the first place.
19. Seek Affordable Outside Funding
You might think that taking on debt is counterproductive when running a business. Actually, taking out a low-cost loan can be a great option for companies who are in good shape financially. This blog post from SmartBiz Loans outlines how outside funds can help you grow and save money: The Benefits of Long-Term Debt for Your Small Business.
Wondering where to turn for low-cost funds? SBA loans are generally known as the “gold standard” in small business funding due to low rates, long terms, and very low monthly payments. To determine where you stand before you apply, try out SmartBiz Advisor. This easy-to-use online tool generates your unique “Loan Ready Score” and offers suggestions to improve your numbers, if needed.
Not quite ready for an SBA loan? We’ve worked with SmartBiz marketplace banks to offer other funding options, like bank term loans and credit lines. Visit SmartBiz Loans here to learn more and get started.