6 tips for business efficiency
Increase your profit margins and take your business to the next level
Business efficiency means maximizing your outputs from your given inputs, and is known as making the most of your resources. Reducing your costs and maximizing your output are tried-and-true ways to beat your competition, increase your profit margins and take your business to the highest heights. But this only scratches the surface of what it actually takes to create an efficient business. You’ll need to broaden your business knowledge, find your focus and implement best practices to help you reach your goals.
Want to take your business efficiency to the next level?Learn More
Efficiency vs. effectiveness in business
First, let’s take a look at two common business terms that are often confused: effectiveness and efficiency. One easy way to differentiate these terms is to think of an effective employee as one who produces very high quality products, while an efficient employee produces products quickly. That is, effectiveness has to do with quality, while business efficiency has to do with time.
Ideally, you want a workplace that is both efficient and effective. You don’t want to simply produce things quickly at a low quality, as this will affect your reputation, but you don’t want to produce very high quality products in a slow, expensive manner, as this will affect your bottom line. Where is the happy medium? How can a business improve efficiency? And how can technology help?
Business efficiency: A deeper dive
There are actually several types of business efficiency, and they’re all important to your bottom line. Take a look at these areas of your business to find opportunities for improvement:
The amount of work or product your employees output per day is one of the most essential factors in your business efficiency. Your workforce must be not only efficient, but innovative and effective, especially when you are scaling your business.
Financial efficiency is a top contributor to your bottom line. Measure your expenses as a percentage of revenue – and don’t let them exceed 30 percent. Your workforce and expenses often overlap, because expenses like tools and equipment affect labor productivity.
Streamlining the manufacture and delivery of your product is one of the most reliable ways you can improve your business efficiency. Creating adaptable yet dependable internal processes and operations is vital to mindful scaling and business success.
How can a business improve efficiency?
All businesses should be running at their most efficient. Increasing your efficiency can help you raise your profit margins, stay competitive in the market and even improve your innovation. Try these 6 tips to get ahead.
1. Provide the right tools
It seems obvious, but you might be surprised how many businesses aren’t providing their employees with the skills and tools they need to do their jobs. The one-time fee or yearly subscription cost you may pay for a tool will often repay itself tenfold in terms of getting work done quickly and accurately.
2. Do a daily standup
Also called huddles or scrums, a short, daily team meeting should be a part of your routine. Keep your team updated on what everyone is working on, who needs help and who might have extra time and problems or questions team members have. Face-to-face communication is the most efficient. Other than this meeting, try to limit interruptions throughout the day.
3. Channel your team and company focus
Don’t confuse being busy with being productive – they’re not necessarily related. We all know someone who is always busy, but never seems to get anything done. As Tony says, “Where focus goes, energy flows,” and it’s crucial to keep your employees focused on just one task or goal at a time. Make it clear what’s most important, and efficiency will follow.
4. Know what to cut
Examine your operations and the processes you have in place. Look for redundancies, dated or excessively complicated processes or unclear procedures. These are all prime candidates for consolidation or elimination. But don’t cut corners. Prioritizing efficiency over quality or safety only leads to bigger problems down the line – when they’re more expensive to fix.
5. Never stop improving
Running a successful business takes a certain mindset – one of constant improvement, hunger and the knowledge that there is always more to learn. It’s a personal trait, but it is also one that you can make a part of your company culture. It will encourage risk-taking and innovation, which are both important in creating efficiency.
6. Use technology
In terms of tools to help us make business – and our lives – more efficient, there has never been a more exciting time to be alive. Use technology strategically to complement the strong workforce you develop.
How does technology help business professionals be more efficient?
Technology nearly always increases your efficiency. It falls into both the workforce and expense categories; however, it will easily pay for itself in terms of output versus cost. Wondering how technology can increase efficiency in a business? There are several different ways.
Digital integration, like smartphone apps, online booking and other innovations, helps people access and use your product. This technology can increase demand for your product and is often a necessary investment in today’s online world.
Task management software
Task management software is an internal tool for running your business. It improves communication and scheduling and makes it more clear who should be working on what.
Automation technology can increase efficiency in a business in many different ways. It includes technology like artificial intelligence that sorts data and performs calculations, as well as automated machines in manufacturing facilities.
Tony says, “One reason so few of us achieve what we truly want is that we never direct our focus; we never concentrate our power.” This applies to business, too. The first step to increasing your business efficiency is to zero in on your goals, communicate them to your employees and set reasonable benchmarks to measure your success. Tony’s Business Coaching and Business Mastery events can help you gain the skills you need to take your business efficiency to the next level. Soon you’ll be overseeing a well-oiled business machine.