Strive for efficiency gains!
The more efficient you can become in your operations, the better your gross and net profit margin will be. Greater efficiency, in this sense, means getting the same output, in terms of your product or service, with the use of fewer resources.
Technology can be used to automate certain activities. Procedures can be put in place to standardise the way things are done, often saving a considerable amount of time. Staff can be trained, and they can be motivated – both of which should secure quicker working, and reducing absenteeism and staff turnover can have a profound impact on efficiency.
Borrowing an expression from one of the biggest management tools of the 1980s, ‘TQM’ – a ‘right first-time’ approach to quality will also have a massive impact on efficiency – work out how much time is lost in your business correcting errors, doing things for a second time and dealing with customer complaints – all of these are, potentially, avoidable, if everything happens ‘right first time. Research has shown, alarmingly, that at least 25% of all time spent by UK staff is on correcting things that should have been ‘right first time’ – that’s an amazing statistic and one that means that, in theory, you could cut your wage bill by 25% by focusing on this alone!