From the moment you opened the doors to your small business, you’ve probably been deeply invested in its success. You put in the time, sweat equity, and investments to bring your idea to fruition. However, at some point you may have asked yourself: How can I get my small business to work harder for me, without having to work around the clock, wearing multiple hats and constantly addressing issues?
These are questions that all small business owners often ask, particularly when their ventures reach the point of profitability but need a boost to get them to the next level.
Here’s the good news: there are a variety of ways business owners might be able to optimize their investments and maximize their company’s profits. And in return, they might be able to give more to their company, customers, and themselves.
6 Ways to Start Optimizing Your Business Today
Here are six ways you might start optimizing your operations and get your company to work harder for you:
1. Assess your organization’s cost structure and cut where you can. If you’ve been running at high speed fulfilling customers’ requests and working one-on-one with clients, you may not have stopped to assess your cost structure and make some necessary adjustments. Consider identifying all business expenses, including both variable and fixed costs. You may then want to prioritize these expenses by importance and pinpoint any that aren’t contributing to your company’s success.
Inventory that’s sitting in your warehouse, insurance policies that could be shopped around for better rates, and unused monthly subscriptions are all good starting points. Once you’ve made the cuts, start monitoring spending every month to avoid having to go through this exercise again.
2. Take a close look at existing processes. Time is money for small business owners and team members who only have a limited number of hours in a day. Redundant processes, rework, and tasks that are taking too much time to complete are all good targets for optimization. Talk to your employees about their biggest time-wasters and help them get those projects finished faster.
Automation might help in this area. For example, if your accounting manager spends too much time generating customer invoices, find a software solution that automates some or all of that process. Consider outsourcing non-core tasks like payroll, customer service, or graphic design to free up yourself and/or internal resources to focus on more strategic projects.
3. Ask your suppliers for better deals, terms, and perks. The business environment is always in flux; nothing stays the same. If you’ve been paying the same prices and getting the same service levels and terms from suppliers for some time now, you may want to revisit those contracts and negotiate for lower prices, discounts, or extended payment terms. Come to the table with information about industry trends and market prices, and be sure to emphasize your value as a repeat customer.
Negotiations that work out in your favor can also help you offer your customers more competitive pricing, improve your company’s cash flow, and increase its profit margins. As a bonus, these interactions will also help solidify supplier relationships because your vendors know you’ll come to them with these requests, versus just taking your business elsewhere.
4. Put business credit cards to work for your company. Used properly, business credit cards might help improve cash flow, simplify expense tracking, and maintain better controls over employee spending. For example, a business credit card used for travel expenses can be closely monitored and used to establish spending thresholds. Credit cards can also be used for larger purchases that can then be paid off over time versus coming out of your business bank account.
Most business credit cards also come with expense tracking tools, real-time transaction notifications, and other functionalities that streamline financial management. Finally, you can use credit cards to establish your company’s creditworthiness and position it for a “yes” answer on that future loan or financing application. PNC offers a tool that you can use to select the best credit card for your small business.
5. Take advantage of rewards programs. By strategically using rewards programs, you can save money on expenses that range from travel to office supplies and technology. Most business credit cards offer cash back, miles, or points on every purchase. Most office supply stores offer loyalty programs, while suppliers may also have rewards programs for repeat buyers.
Sign up to use these programs to your advantage. When you earn cash back for everyday expenses or accumulate points that can be applied to hotel stays, you’ll be contributing to your company’s bottom line without much added effort. With business payment cards, your small business can earn valuable discounts, rebates, and rewards.
6. Use goals and KPIs to track progress and then adjust accordingly. Small business optimization isn’t a “set it and forget it” exercise. For best results, consider it an ongoing task that involves your entire team. Set some specific goals and key performance indicators (KPIs) to help keep the progress on track and identify new areas of improvement. If you want to increase sales this year, for example, consider tracking metrics like revenue growth, customer acquisition costs, and average order value.
If these KPIs aren’t meeting your expectations, explore the underlying causes and adjust accordingly. For example, if your average order value is lower than you’d like, you may want to test out some upselling and cross-selling opportunities on your e-commerce site or in your physical store (e.g., someone who orders a kayak probably also needs the accessories, garb, and sun protection to go along with it). If revenues aren’t meeting expectations, it could be time to diversify into new lines of business or start marketing to new customer segments.
Make Your Business Work for You
It’s all too easy to get caught up in the day-to-day running of your small business and forget to take one step back and identify potential areas of improvement. Whether you want to increase sales, improve customer satisfaction, boost efficiency, or hit a different goal this year, it’s never too late to start optimizing your operations, improving efficiency, and making your business work for you.
To learn more about how we can help you optimize your business, visit us online.
