How to Reduce Costs, Improve Efficiency and Streamline Operations of a Business

Running a successful business involves not only generating revenue, but also managing costs and maximising efficiency. If you’re looking for ways to reduce costs, improve efficiency, and streamline processes, below are some strategies that can help. 

Evaluating processes and finding solutions for cost reduction requires focusing on some key areas:

  1. Have you matched the right person for the task?
  2. How clear is the process?
  3. When the process does break down, where are the broken cogs (known as The Leaky Bucket Process)
  4. Is it your process or perhaps your vendors?
  5. Find solutions

Each one of these five factors need to be addressed in order to reduce costs and improve efficiency. 

The right person for the job is probably the most important part 

  • Ensure the person or team allocated with the task is fully trained and has fully comprehended the process from A to Z. Understanding the full process (not just their role in it) will provide them with a deeper understanding overall and help them to understand the reasons and importance of their role. 
  • Have clarity on the process – just because it makes sense to you, doesn’t mean it makes sense to them. 
  • Ensure that from a remuneration perspective, the right person is allocated to the job. I often see owners or directors earning $500 per hour to perform a job that I could easily fill with someone charging $38 per hour. It most likely happens because they believe they can do it better or faster but this isn’t always efficient in the long run. 
  • At times, business owners can feel that explaining or teaching someone else makes things harder and it is easier and quicker to just do it themselves, however this line of thought can turn out to be very expensive. 

Clear process or process mapping adds clarity and stability

  • Map out the process, but don’t use fancy graphs or charts. Use simple steps and terms that are familiar to your team and industry. There is no need to over complicate things. 
  • A great step I often implement when consulting on processes is building the process with the team or the person directly involved in executing it. If they build it with you, and have an input into the process, they are more likely to follow it.

If after launching, the process is still clunky, it is time for The Leaky Bucket Process to understand where the broken cog is

  • Where is the process “stuck”? Clearly identify where the process is taking too long, where mistakes are being absorbed or steps are being double handled.
  • You can bring your team together and listen to their reasoning of the WHY and have their input on the solution.
  • Try the mystery shopper process and use your own experience as a consumer. it is a great external view on your process, putting yourself in your client’s shoes is paramount. 

It might be your vendors and not your process

  • If you are providing a service as a channel partner or are a reseller, if you manufacture a product that requires parts from others, shop around, find other suppliers or partners that can do the same. Try not to put all  your eggs in one basket. 
  • Negotiate better payment terms because cash flow is KING.
  • Negotiate better pricing.
  • If you are in a sole relationship with them, ask for contributions for your promotions of their products.

Find solutions

  • Embrace technology – it can help automate many of  your business processes. Don’t fear the cost, most provide free testing periods so you can try before you buy. 
  • Cut unnecessary expenses. Find the areas you can cut costs without jeopardising your quality.
  • Improve your hiring process so you always get the best person for the job. 
  • Train your team! Nurture and develop them as they are ones that are needing to deliver a seamless process. 
  • Set behaviour and monetary KPIs.
  • Considering outsourcing non-core functions, such as accounting, IT or HR. This will help you to stay focused on the long-term goals and your genius zone.
About The Author <p class="admin-name">Oshi Kirk</p>

About The Author

Oshi Kirk

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s.

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