What’s the secret of entrepreneurs with growing businesses? For one, they’re incredibly organized. But they also know how to optimize operations for small business success. They have processes in place that support profitability, engagement, and efficiency while reducing wasted time and resources.
If this sounds too magical to apply to your business, think again! Rest assured that if you tackle just a few points from this list of proven small-business optimization strategies – or even just one that resonates the most – you’ll see results.
How can you make operational improvements to your small business?
Small businesses that prioritize operational improvements tend to be more nimble. They can respond to opportunities, adapt to market changes, and create competitive advantages that build small business success.
What operational elements will lead to small business optimization for you? Don’t be overwhelmed: As the owner, you can identify and prioritize needs and opportunities, but you can delegate the work to your employees. This can help them develop new skills, strengthen job satisfaction, and foster productivity.
19 operational improvements for small business success
There are five major categories you can focus on for operational improvements: financial management, employee engagement, workflow optimization, product and service optimization, and business planning.
Review the list below and choose one or a few strategies to implement in your business. When deciding what to pursue, consider how your business could benefit from each action and what it would take to make that change. Then, simply give it a try!
Financial management
- Create an annual budget aligned with your goals and review it monthly. While many small businesses launch with a budget, over time, fewer stick to the process. However, it can be a useful tool to help you fund your growing business while identifying and eliminating unnecessary expenses.
- Review your financials and cash flow. This is another area that sometimes slides as businesses grow. If you find that your financial reviews occur quarterly or less, try scheduling weekly or monthly reviews to monitor your financial health, identify trends, and make informed decisions.
- Use the right accounting software. Many businesses eventually outgrow Excel for bookkeeping and need something more advanced to keep up with their needs.
Your accountant can recommend a program that covers everything you need today with room to grow. Ask them to set it up to ensure it’s done correctly, which will save you money, time, and many headaches down the line. Then, leverage its functionality by automating daily tasks like invoicing, accounts receivable (AR) follow-up, and bill payments. - Plan for your taxes and insurance. Many small businesses don’t set aside enough funds for the taxes and insurance that are due each year. Work with your accountant to ensure you’re fully covered and enjoy how calm you feel when those significant payments aren’t scary anymore!
- Build a financial cushion. Save a portion of your business’s earnings to create a financial safety net for unexpected situations. If you need a working capital cushion, secure one through a small business loan or line of credit. This is essential for covering unplanned expenses or during slow business periods.
Employee engagement
- Create a positive work environment. Employee turnover impacts workplace satisfaction and negatively affects your profitability. Talk to your team to learn about what truly matters to them in the workplace and create a culture in which every member is valued, empowered, and respected.
- Structure your business’s hiring and onboarding program. Too often, employees are thrown into jobs with little-to-no training. Instead, implement an onboarding program that includes all the basics and the responsibilities specific to each role, and that also emphasizes your business’s values and culture.
Consider cross-training employees so that there’s no workflow disruption when, for example, a couple of team members are out at the same time. And ensure your employees know where to go when they have questions or difficulties. - Set clear expectations and goals. To be successful, give your employees clear goals and a path to achieve them. Provide frequent feedback – daily or weekly team updates will keep your employees updated on the latest news and policies. And semi-annual performance reviews will give them a more formal meeting for feedback and support their individual achievement.
- Offer pathways for advancement. Ask each of your employees about their longer-term goals, then invest in training that helps them do their best work. Rewards can include promotions, bonuses, raises, additional paid time off, or other forms of recognition.
Workflow optimization
- Map out daily processes and standardize procedures. This is an area in which businesses tend to lose efficiency and profitability. It’s also an area in which your team’s input is vital to the discovery process and successful outcomes.
Every business has a basic workflow. When you visualize yours, you’ll find bottlenecks, duplication, or otherwise inefficient work that can be streamlined or eliminated. Once you’ve identified these, create a manual of standard operating procedures (SOPs). This helps your team operate more efficiently, improves quality and consistency, and makes it easier to train new employees. - Aim for continuous improvement. Encourage employee feedback to discover how operations can be optimized. When you’ve determined which improvement strategies to test, delegate the implementation to team members based on their skills and strengths. Empowering employees to make decisions and take ownership of their tasks can lead to more efficient workflows and higher job satisfaction. Even relatively small changes can result in significant improvements.
- Choose the right customer relationship management (CRM) tool. CRM programs allow you to manage your customers and identify overall trends through contact details, communication history, purchase records, and preferences. Many of these programs also include analytics and reporting tools, which offer valuable insights into customer behavior, sales trends, and campaign effectiveness.
A CRM program can also automate many day-to-day operations. You can set up automated follow-up communications, appointment scheduling, and email marketing. Incorporate these features into your CRM strategy to create an efficient process that still gives your customers a more personalized experience.
It’s important to find a CRM program that’s the right fit for your business. Consider how you, your team, and your customers could benefit from better-managed data and streamlined processes that come with a CRM program. Do some online research and talk to employees, industry colleagues, and other small business owners for recommendations. - Leverage outsourcing. Consider outsourcing non-core activities such as accounting, human resources, or tech support. When you hand these aspects of your business over to the experts, it gives you more time and energy to focus on your core work.
Product and service optimization
- Conduct an audit of every product or service. Many businesses launch with a focused group of products and services and build on this base over time. Review yours to see if they continue to generate profit or measurable customer engagement. If they do, then all is well. However, if any result in wasted resources, then it’s time to reduce or eliminate them.
- Optimize profitability while maintaining quality and service. Many customers are price-motivated, looking for the best deal without sacrificing quality. When you can offer them a product and service that’s high-quality and worth their spend, you’ll earn their business. To keep your prices affordable while maintaining quality, ask vendors/suppliers to negotiate deals for bulk purchases, or offer packages of goods or services that increase perceived value while boosting your average sale.
- Respond thoughtfully to customer demand. If a few customers ask for a product or service, consider whether a large portion of your customer base wants it before you dive in. A few requests out of thousands of customers may mean that it’s not worth your investment, while a few requests out of a handful of clients shows that there’s high demand. Know that you can’t be all things to all people. Small business optimization often requires making wise, if sometimes difficult, choices.
Business planning
- Update your business plan: Many business owners create a pre-launch business plan but few update it as their business evolves. For small business success, you’ll need a current plan that’s aligned with your current goals. An updated plan ensures that you focus on your mission and vision, use resources to grow, and avoid getting sidetracked by unrelated opportunities. It might also be required when you’re applying for a business loan.
- Set and implement actions that will achieve your goals. This can include expanding products or services (or scaling back), entering new markets, and continuing to improve processes. You might consider promoting and training staff members into management positions to alleviate some of your day-to-day responsibilities, too! Allocate your resources to your new tactics and put your growth plan into motion.
- Review progress and act. Establish benchmarks to monitor progress to goals and regularly review them. If adjustments are necessary, get the information you need to understand why (this ensures that the next actions taken will get you back on track), then implement.
Commit to implementing a strategy within the next month – even one step gets the ball rolling. And before long, your small business will be connecting with staff and customers and rolling with day-to-day challenges, all while making progress toward your goals!
Pursuit is a resource for small business success
If small business optimization feels overwhelming, remember that you have great resources all around you! Your team members, industry colleagues, and outside organizations and contractors can help you get firmly on the path to small business success.
Pursuit is here for you, too. With more than 15 business loan options and a full library of business resources, you can find everything you need to keep your business growing. Contact us if you have questions or would like to move forward with financing that supports your success.
