Improving business efficiency is often a high priority of all companies – especially those working in industries that require strict deadlines to be met. If a business is working at optimum efficiency, costs are likely to be low and productivity levels will be high, resulting in a boost in profitability.
Many factors need to be considered when businesses are looking to improve efficiency. Streamlining processes and reducing any avoidable downtime are two of the main areas that need to be addressed. But where should you start? If you’re not sure, don’t worry, this post will outline the main ways businesses can improve their overall efficiency and productivity levels.
We’ll cover:
- What is Business Efficiency? Why Should it be Prioritised?
- Reduce Costs Where You Can
- Streamline Any Lengthy Processes
- Reduce the Chances of Avoidable Downtime
What is Business Efficiency? Why Should it be Prioritised?
Simply put, business efficiency is the measure of how much output a business produces compared to the levels of input injected. Calculating your business efficiency is a good way to highlight any underlying issues that you may not have noticed on the surface. It’s directly related to productivity and profitability and can help you make smarter business decisions based on your findings.
Various areas that contribute to the efficiency of your business. These are:
- Cost efficiency. Is your business spending more money than it needs to? If you have constant money leaving the business for resources that you’re not getting maximum use out of, then that’s going to eat into your profitability and will result in your company not being as cost-efficient as it can be.
- Labour productivity. Are your team members working to their optimum capacity? Or, are they coasting and just doing enough to get by? If it’s the latter, your business isn’t operating as efficiently as possible and you need to improve productivity throughout your workforce.
- Energy efficiency. Overheads and utility costs are, unfortunately, unavoidable. Is your business utilising the money you’re spending on them effectively? Take a look at the weekly average working hours as a starting point for working out your energy efficiency.
- Environmental efficiency. Are your business operations harming the environment? Are you producing a lot of non-recyclable waste? You should aim to reduce your wastage, as this has a direct impact on how efficient your business is and increases costs too.
If you can improve the above-mentioned factors, you’ll be well on your way to improving your overall operational efficiency. It can be quite daunting knowing where to start, depending on the state of your business it can be a pretty big job and can uncover problems that are tricky to deal with. However, to maximise your potential, it must be done.
Reduce Costs Where You Can
Maintaining cost efficiency is crucial to increasing the overall success of your business. If your business’ costs are almost as high as their revenue, they’ll be putting in the hard groundwork for very little return. However, if a business can cut unnecessary spending whilst keeping their revenue at the same level, it’ll free up a lot of money and can be used to help drive the business forward.
Unfortunately, industrial businesses incur a lot of costs. This is all the more reason to be strict with your outgoings. Typical major costs for a warehouse or factory will be staff wages, training and development, overheads and premises and materials. Some of these are fixed-term prices that can’t be changed, so you need to factor these into your monthly forecast each time.
With the likes of materials and premises, there may be room for movement on the price depending on how much stock you buy or how long you sign the contract for on your current site. If you can prove to the supplier that you’re going to be a long-term, valuable customer to them, they may be more likely to grant you a favourable rate. We can’t guarantee that, though.
You should take a holistic view of your business’ finances and prioritise them as necessary or luxurious costs. Obviously, the necessary ones can’t be ruled out from your monthly outgoings but do you really need the luxurious ones? Are they benefitting the business so much that you couldn’t operate with them? The nice-to-haves are hard to get rid of but you need to be ruthless if you’re aiming to operate at full efficiency.
Streamline Any Lengthy Processes
Are lengthy processes slowing your operations down and forcing you to turn away valuable business? One of the easiest ways to solve this and improve your business efficiency is to automate tedious processes and simple tasks. By introducing machinery to undertake repetitive jobs, you’ll then free up more time for team members to focus their efforts in other areas of the business that desperately need it.
Lengthy processes mean that each project is taking a lot longer than it needs to. If you have a lot of jobs and clients, that time wasted can soon add up. In industries where time is money, wasting time is a cardinal sin. Not only are you wasting time and effort but you’re flitting money away carelessly too – which isn’t a sustainable way to run a business, is it?
You may find that the length of your processes is fine but it’s your business productivity that’s causing the issue. Low productivity levels are harmful, especially when you’re trying to work at optimum output. When productivity is low, it usually has a knock-on effect throughout the whole team and can affect team morale.
Long processes usually include various quality checks – but do you need that many? If you can remove some of the unnecessary stages whilst still maintaining quality, you’ll be able to welcome more clients and jobs. Therefore, you’ll be able to increase revenue, profitability and overall efficiency.
Reduce the Chances of Avoidable Downtime
Downtime is undoubtedly one of the biggest costs to businesses. It can seriously harm businesses – either avoidable or unexpected. It can impact revenue, delay your project deadlines and increase pressure on your workforce too. During downtime, businesses are forced to stop their operations partially or completely as a consequence of previous events.
Downtime can happen for various reasons depending on which industry you’re in. From global pandemics to accidents in the workplace, they can occur unexpectedly or you can easily avoid them. For example, if your warehouse isn’t as clean as it can be, it’s indefinitely going to slow down your operations. If there’s dust and debris on the site floor, it creates a huge risk to your workforce daily and can maximise the risk of contamination and the resulting downtime.
Avoidable downtime is a consequence of poor business efficiency and can cost your company dearly. Think about it, if you’re forced to stop your operations partially or fully, you’re going to decrease your revenue and profitability. Not just this, but you’ll have to disrupt ongoing contracts and deadlines, which will cause concern for your clients and could lead them to take their business elsewhere.
Not only can it harm your business in the short term but it’ll damage your reputation and affect it long term too. Businesses will then decide to take their custom elsewhere and you’ll be in the spotlight for all the wrong reasons. So, to make sure you decrease the chances of any avoidable downtime you should:
- Train staff appropriately.
- Regularly deep clean the workplace.
- Keep staff morale and motivation levels high.
Use the Right Equipment to Improve Business Efficiency
You should aim to set your standards high throughout your business – not just the customer-facing facets. Your standard of service starts from the ground up – and we’re not joking. If your workplace floor is dirty, your business and service will reflect that standard throughout your operation.
Not only will you work at lower output levels but you’ll definitely experience more issues than you need to by having an unclean workplace. It’s unprofessional and doesn’t reflect well on your business. So, you need the right industrial equipment in place to clean it properly and produce amazing results.
An industrial floor cleaner is just the start of the equipment that you need to operate your business as efficiently as possible. But don’t just take our word for it. Download our free guide today to find the right solution for you and see how it can positively impact your business.
