As a small business owner, it is easy to get so wrapped up in the web of daily operations that you may never notice inefficiencies in the system until it is too late. A study conducted by the Siemens Enterprise Communications group found that inefficient communications alone cost SMBs $5000 per employee every year. Add to this the inefficiencies in manufacturing, distribution, technology, etc. and you can see the costs add up pretty quickly.
As an operations consultant, I work with companies to weed out these inefficiencies. Over time, I have realized that the best way to approach the problem is by identifying the four pillars that contribute to the health of an SMB. By independently tackling the challenges in these four pillars, it is possible to handle growth regardless of how quickly it happens.
Organization Standards: Many times, small businesses dismiss the standards and processes that are followed in larger corporations as a symptom of bureaucracy and red-tape. There is no doubt that a number of large companies do suffer from red tape arising from unnecessary processes. But that does not make the concept of following due processes redundant. According to Aaron Chatham, tech architect and blogger, one of the optimal ways to bring this about is through establishing an organizational structure. By deploying governance toolsand process consultants, your business can ensure that the team structure is agile and ready to handle any scale of business.
Security: Security is often an overlooked aspect of small business management. The underlying assumption is that only large businesses are targeted by hackers and malware distributors. But according to a report published by Kaspersky labs, over 60% of small and medium-sized businesses are victims of malware-based data attacks every year. It is important for small business owners to realize that keeping the security infrastructure of your organization is like buying yourself (delete an) insurance – the investment often seems like wasted expenditure. But when you do need it, you will need it quite badly. By constantly upgrading your security and backing up your data, you can avoid the one inefficiency that can potentially put you out of business.
Growth Management: When a company grows, it is not just the revenues that multiply. The churn, expenses, inefficiencies, red tape – they all multiply too. It is important that the business owner always has a plan in place for the next phase of growth. So how do you do it? The first step is to make every staff and tool in your company replaceable. That is, there should not be an employee in your company that is the sole authority on any particular process. This way, when any employee leaves the company, you can be rest assured that your business will move along fine without any hitch. Also, when your company grows, you can always ensure that you have people to multi-task and take care of the main points without delays due to recruiting additional staff.
Life-Cycle Management: The fourth and final pillar of a healthy SMB is proper management of your product life-cycle. As your business grows, there is an inevitable rise in the number of SKUs handled, the time to market and wastage. Through an optimized product life-cycle management process, you can efficiently handle the wastage and optimize the time to market. While the processes to optimize life-cycle management can be learned, it is always advisable to hire a PLM consultant to help you with establishing a process.
Author Bio: Ian McGrath is a lean manufacturing consultant who works with businesses on identifying operational inefficiencies and helps them optimize their work processes.