Operational efficiency: an essential to grow your business
Business growth is what we’re talking about, but to achieve growth, you must scale your business.
Growing your business means adding parts. More clients, more employees, more desks, more anything. Scaling your business means that your revenue increases, but your resources stay about the same.
For more on that see my post Why scaling is better than growth for your business.
And to scale properly, you need good systems.
Operations are the inner workings of your business.
Efficiency is about reducing waste.
Operational efficiency is about maximizing your resources and getting things done without losing time, materials, money, tools, people, and any other resource.
So how do you, the business owner, ensure operational efficiency?
ROI – why something gets done
The starting point.
As the boss, you are the starting point for deciding what has to happen in your business.
Whenever you give instructions or directions, you have to explain why it’s important or what the return on investment is.
That makes it ok for you to ask someone else to do this work.
As you think of your business priorities and expectations, ask yourself what the ROI will be for each
KPI – how you recognize it
The end game.
As the boss, one of your biggest challenges will be communication with your team.
Describe the expected results of each decision.
Describe what people will see, describe what changes in the business, and describe the tangible results that you all can expect from those decisions. You’ll make sure everyone’s on the same page.
As you think about what you want to see grow in your business, ask yourself how will you recognize it when it happens correctly.
ROI & KPI – that’s your job
Micromanaging your team is not conducive to operational efficiency.
Good communication is. So are clear expectations.
To achieve the two latter outcomes and avoid the first, manage ROI & KPIs, and let your team do the rest.
Look at your current business goals or priorities. Can you easily add the ROI and a list of tangible KPIs for each? Let’s get on a 30-minute call to make sure you have what you need.