Efficiency is the intersection of where time and money meet. The universal business saying of “ Time is Money” perfectly illustrates the need for efficiency in your business. This is even more magnified when personal funding and solo-preneurism are prevalent…
The key for any business regardless of size, type and style is to do “ more with less”. This means more time up your sleeve and more money in pocket… however, unfortunately this is seldom the case. In most instances long hours are at play, fumbling through the day only to do the same thing the next day, often with little to no financial gain.
In the rare case that some businesses do have good profitability systems, their processes and efficiency modelling are basic or non existent, with the volume of sales compensating for the lack of and “masking” their inefficiency.
The first place that I like to tell my business owners to start is by asking the right set of questions. I believe the quality of questions you ask reflects the outcome of any situation that you may be in. Often business owners “do and act” rather than think ,ask and reflect. Hence the even greater need to “ think” efficiency rather than have an adhoc approach.
So here goes:
What is Efficiency to you?
Not all efficiency can be graded or stroked with the same brush. For some businesses, having someone simply do the accounts and free up the business owner to go and do another task within the business, is a big chunk that would otherwise be a pain on a Sunday night, the day before the BAS is due.
However for some business owners a deep analysis of every conceivable part of their business is in order. In answering the question: it is important that you connect efficiency with a larger overarching principle of your business vision. By this I mean what is the bigger picture for you? What’s the outcome you are looking to produce from your business? Knowing your bigger picture allows you to dictate the approach you would take with relations to efficiency essentially asking the question…Why do I need to be efficient? This almost precedes the first question being the “what”.
One of the challenges that business owners of all sizes face is the ability to think big ( vision ) and small (task integration) simultaneously. This skill is something that needs practice, however once understood creates a dynamic that breeds success. It clarifies the need for efficiency to reach the overall vision swiftly and with certainty and safety.
Now this is both associated with an ( internal driver ) i.e whats the reason behind the need of efficiency and what it means to me on a deeper personal level, and also an external driver i.e what is the reward it gives the business?. These are both as important for the success of efficiency modelling. One without the other can’t exist like good and evil in the Star Wars saga.
2. How is efficiency measured for you?
Text books tells us that you should have the standard of McDonalds or of Toyota’s incredible Kaizen standards. Now that is good and proper if you have an unlimited budget and staff in abundance… right? However if you are a small to medium sized business and you want to at least start the process of creating efficiency in your business I believe the best place to start is by understanding the above “ what is efficiency to you” and then be able to set some simple parameters that will measure the progress you are making with your efficiency.
Let take email as an example:
A great way to create simple efficiency is to limit your email responses to no more than 1 – 2 paragraphs. Now in some situations it will depend on the level of content needed however with good practice and thought you are able to tell a lot with a short amount of words
You can also tell your staff , clients or suppliers to respond using the same technique and also limit the amount of responses needed in order to communicate whatever needs to get done simply.
On top of this you can decide to ONLY check email once per day rather than constantly refreshing every 2 seconds…
What this gives you is the ability to measure sustainable efficiency. Often the simple tweaks create the biggest shift and the most bang for your buck!.
In saying this your goal with efficiency modelling is to start with one area of the business and stick to creating an increased level of efficiency. What can be measured can be grown. One of the most important factors to consider about efficiency is incrementally improving your model. Small steps are easier to manage and measure so rather than trying to reinvent your entire business, start with making some small changes, and then slowly but surely keep getting better.
Here are a few more idea’s to get the juices flowing for you by asking the following questions:
Time management – If what you are doing requires X amount of time – how can you have less touches ?
Task Delegation – If you weren’t doing it how would you show someone else to?
Cost efficiency – If you only had a limited amount of $$ to get it done what would you do differently
Goal Path – If you were playing a game of chess or checkers whats your approach – Clearest path to goal
At the end of the day the smarter you work the better… right? When efficiency is done well money meets time and your business grows substantially. It becomes easier to do what you do, whether you want someone else to do the heavy lifting for you ( outsourcing for efficiency and cost reduction ) OR you simply just want to take it a little easier ( time management ). Creating efficiency models in your business makes a significant difference to the bottom line and as a business owner you know what that equals.