Can you imagine how much more money you could make this year if you could achieve 2008 Revenue with 2011 Overhead? As the economy slowly improves, your challenge is to resist the temptation of spending the extra income you generate this year on non-revenue generating overhead.
As business increases, you are going to need more people and resources to keep up, right? Perhaps, but if you and your staff will take the time now (before things gets crazy again) to work on your business processes, you will find that you can do more with less and move that extra revenue straight to your bottom line. Here are a couple of things to think about that will help you control your overhead:
Resist the temptation to hire more people
Don’t panic yet! If you’re busy and you think you need more help, do these two things before you hire: (1) Ask your existing staff to step up and do more, and (2) make sure there isn’t some way to change your processes to do more with less.
Upgrade when possible
If you do have to hire, look for a higher quality employee than you may have hired in the past. You may find that you’ll pay a little more money, but you if managed properly, you will be able to get higher quality and a greater quantity of work out of a better employee.
Pay more/expect more
Most business owners have been forced to withhold pay raises or in many cases they’ve even had to reduce pay in order to keep costs down. As business improves your staff expects to be rewarded with a pay increase, but only pay more if you think you will get more. In order to earn more money, a staff member should meet certain productivity targets, which you need to set out as goals for them. Don’t be afraid to ask someone to be more productive!
Look for inefficient processes in your business and get them plugged
Just because you’ve been doing something a particular way for as long as you can remember doesn’t mean that is the BEST way to do it! Look at your business processes objectively and challenge the norm. You’ll be surprised what you can improve upon.
Ask your staff to help
Your operations staff generally know what your weaknesses are and can probably give you great ideas, if only you would encourage them to participate with you in the improvement process. Ask for their help and reward them when they come through. By the way, rewards don’t have to be monetary in order to work – Special recognition is often enough.
Ask for help from outside your company
You have numerous resources available to you that could help you take an objective look at your business and provide suggestions for improvement. Your CPA may be a great resource. Another source that may be useful is to call upon your peers. You may be surprised at the willingness of other business owners to help you out – as long as you are willing to reciprocate. Finally, there are a number of consulting firms available that specialize in business process improvement. However you do it, find a way to get an objective review of your processes.
Don’t forget your customers
As important as it is to keep costs under control and to streamline your processes, NEVER forget that any changes you make have to be weighed against what effect they will have on your customers. Smart streamlining will increase your profits AND provide a better customer experience.
Running a successful business today requires agility and a willingness to adapt to change. The timing is perfect for you to adopt new processes and streamline your business – and put more money in your pocket at the end of the year.
I’d love to get your feedback on the process of change. Use the comment section below to share your experience.