“Putting systems in place to optimise efficiency in your business is key to allow you to focus on bigger picture items that are crucial to the expansion and growth of your business,” says Hedy Zhou, Founder and Creative Director of Happily Hedy, a design studio for business owners. “By reviewing your processes to improve efficiency, you can reclaim valuable time in your day without the need for additional staffing expenses.”
Importance of operational efficiency in business
Improving operational efficiency means business resources, like time, money and materials, go further and last for longer. It may involve cutting costs, re-negotiating prices with your suppliers, automating repetitive tasks and reducing surplus stock.
When healthy operational efficiency is achieved, you should be able to produce more of your products or services from the same resources, enabling business growth and increased profits, without higher costs.
Improving the efficiency of your business can also lead to happier customers. "No customer enjoys long wait and response times, or communication mishaps, which is why implementing streamlined systems and processes will allow your business to uphold a quality of service that stands above the rest," Zhou notes.
1. Create measurable business goals
Setting tangible goals and key performance indicators (KPIs) will help you identify priorities and more effectively allocate your resources. “You need to know why you’re running the business,” says Emma Jones, CBE, Founder and CEO of Enterprise Nation. Creating specific short and longer-term goals, then regularly tracking progress against them, will keep you and your employees focussed and motivated, she adds.
Once you have your goals, you can create an operations strategy around how your business will use its resources to achieve them. This will help you manage and improve efficiency by ensuring everything your business does is aligned towards fulfilling these goals.
2. Review costs and processes
The processes you implemented and the costs you agreed to when you first launched your business may no longer be appropriate. Evaluate each one, considering how it contributes to your goals. Ask questions like:
- Is this process optimised for quick and efficient goal fulfilment?
- Can I streamline this workflow further?
- Can these costs be renegotiated now that my spending has increased?
- Are these costs as low as possible?
This approach will help you spot any areas where resources or money are being wasted. It may be, for example, that you're generating plenty of sales but not realising a high profit. In response, you might explore raising prices or reducing manufacturing costs.
3. Utilise technology and automation
There are business departments that can benefit from automation. This could include marketing, sales, customer service and accounting. When budgets allow, use technology to automate manual and repetitive tasks. This will release valuable employee time that can be better spent on higher-value tasks that fully utilise their skills.
"I have a client portal which streamlines client communication, project management and other key administrative items like invoicing," shares Zhou. "Implementing systems and templates makes things organised and fast," she adds, freeing up time to focus on what's important.
Technology can also help with customer conversion. According to the 2024 UK Customer Satisfaction Index, up to "35% of customers say positive use of technology by an organisation has led them to use that organisation again". [1]
If you need to invest in new tech, the American Express® Business Platinum Card comes with monthly Dell Technologies credits when enrolled, which can add up to £150 per year¹.
4. Invest in the training and development of your staff
“Creating a culture of efficiency makes an impact throughout your organisation,” notes Zhou. “Invest time in showing your staff tricks to save time on their tasks, and optimise their own workflow.”
When you introduce new systems and processes, ensure you train your employees on how to use them. When your staff are clear on company goals, their roles and how the business works, they will be more motivated to work towards them, boosting productivity and efficiency.
5. Set your business priorities
Setting priorities can be challenging when you’re a business owner juggling many balls. This can leave you with an unwieldy task list, that can make you feel anxious and frustrated. Jones recommends using an Eisenhower Matrix to prioritise your 'to-do list'.
“The Eisenhower Matrix encourages entrepreneurs to write tasks on a grid with ‘urgent’ and ‘less urgent’ at the top and ‘important’ and ‘less important’ at the side,” she says. Then focus on tackling the most important tasks earlier in the day.
6. Stay informed with business and economic news
Having at least a basic understanding of business and economic news and current affairs is crucial for informed decision-making, identifying market trends early, competitive edge and risk management. By staying ahead, business owners can better plan for economic shifts and downturns.
Amex® Business Platinum Cardmembers get a complimentary annual digital subscription to The Times and The Sunday Times, worth £312 per year, helping business owners stay up to date with trade news and the latest economic outlook.
7. Find a mentor with demonstrable experience
Accessing good support and advice as early as possible in your business journey is crucial, as it can help you bypass common mistakes and spot red flags sooner, Jones shares.
There are many places you can look for a mentor, but a good place to start is within your existing network. Tap into old college or University alumni and explore your LinkedIn connections.
Once you’ve identified some candidates, approach them for a working conversation. “Make copious notes and breathe in their knowledge,” suggests Jones. “It can make all the difference to your growth trajectory, from opening up and understanding contract opportunities, to how to build costed plans.”
8. Encourage collaboration across functions
Encourage teams to share knowledge, skills and data. Collaboration will create a culture of shared learning and avoid bottlenecks, delays and duplication. Organise regular meetings and brainstorming sessions, and create opportunities for teams to come together on projects. There are plenty of digital tools you can utilise to support this, such as project management software, document sharing and communications platforms.
9. Better understand how your employees use their time
“Time is money for all entrepreneurs and business owners, and the holy grail is to smash through the important jobs while keeping on top of everything else,” says Jones. Zhou suggests exploring how your employees split their time during the working day. This could involve introducing timesheets, for example. You can use this data to identify where time is being lost and your employees' skills are being wasted.
You can also encourage your employees to come forward with their own ideas about creating time efficiencies and streamlining processes. This helps foster a sense of shared ownership and leverages their input and perspective.
10. Make data more accessible across the organisation
Centralise company data so it's easier for relevant internal departments to access. This will support quicker, more informed decision-making, as well as closer collaboration across teams. Marketing data, for example, could be used by production teams to shape design and development, or by sales teams to refine their messaging and outreach.
A well-structured business that fully utilises its resources usually has more capacity to adapt to new challenges and leverage opportunities when they arise. "Optimising your time and reducing your costs is a vital part of building a profitable business," Jones concludes. "It’s important to ensure you have the right skills, technology and plans in place to get to where you want to be in six months, a year, two years, and ten years."
1. Once you have enrolled your Card Account, you’ll get up to £75 in statement credits between January and June, and the same between July and December for United Kingdom purchases with Dell Technologies on your Business Platinum Card – up to £150 in statement credits annually. Terms and conditions apply. If you'd prefer a Card with no annual fee, rewards or other features, an alternative option is available – the Business Basic Card.
Sources
[1] UK Customer Satisfaction Index (UKCSI), 2024
