Office Administration Productivity

How Small Businesses Can Find and Fix Inefficient Business Processes

Written by Andrej Kovačević

Small businesses everywhere are under intense economic pressure With many  owners looking for ways to reduce their operating costs to stay afloat. Unfortunately,  cutting travel expenses and getting a better deal on office supplies can only help you so much.

Most of the reasons that small businesses struggle financially have nothing to do with these day-to-day costs. In truth, it often has very little to do with what they’re doing but rather how they’re doing it. Blame inefficiency. Processes to identify and correct operational inefficiencies can benefit small businesses.

The average employee wastes 26% of their time on inefficient processes. Fortunately, creating a process to root out inefficiencies isn’t that hard. All it takes is some careful planning and a willingness to embrace change. Here’s a step-by-step guide to finding and fixing business process inefficiencies.

1: Solicit feedback

First, rank and file employees. Get all employees to identify pain points in existing processes. Ask each employee to write down four or five problems they experience in their daily workday that they think could be improved. Making the exercise anonymous can give you better feedback.

After collecting every response, go over them as a group. If any of the issues raised can be solved easily, make changes on the spot. For those that have no simple solution, set them aside for further review. Establish a process through which your employees can leave feedback. Establishing an honest two-way feedback loop is essential in making sure you can continually improve.

2: Prioritise certain issues

Next, go through the unresolved issues and determine which ones are the most problematic for the business. For example, any issues that stand in the way of sales or collection of invoices should go to the front of the line. Order the remaining issues from most to least pressing. This will let you focus on improvements that will have the biggest bottom-line effects without wasting time on making small insignificant changes. In the grand scheme of things, there will be time to get to every problem, no matter how small.

3: Find a single beneficial change

Although it’s going to be tempting to simply go for a total overhaul of the process in question, that’s rarely a good idea. It’s important to remember that most business processes evolved into their present form for a reason and it might be a good reason that nobody’s considering. Instead, pick a single element of the business process that could benefit from a new approach. Wherever possible, look for opportunities to automate some or all of the work involved. Then, design the proposed change and put it into effect.

4: Evaluate and iterate

Work with your stakeholders to gauge how well things are working. If everyone agrees that the change has made things better, consider brainstorming additional improvements to the process. If the change hasn’t been beneficial, go back to the previous step and start over. Keep refining the business process until it is as seamless, fast, and functional as possible. Give the entire process you’re working on to have at least five complete end-to-end test runs before you declare success or make further refinements.

5: Learn from The Changes That Worked

At this stage, it should be possible to start drawing some conclusions about the changes that worked well. If there’s a particular facet of the change (like an automated sub-process or elimination of wasteful steps) that looks like it could be applied elsewhere within the business, give it a try. This is common for small businesses because they may use similar processes across a variety of tasks and departments.

Sometimes it’s because certain employees have moved between departments, other times it’s a remnant of the founder having a hand in everything. Either way, replicating successful changes organisation-wide can save time and maximise the beneficial effect of the efficiency-seeking process. Just be sure to test each process individually.

Repeat the Process

At this point, your small business should have a stable process in place to deal with all of the other issues identified at the beginning of the exercise. All you have to do is repeat the process over and over until every business process is as efficient as can be. Then, keep listening to employee feedback to discover any new issues that arise. That way, your business will stay on top of its game all of the time.This will will give it the best chance of success no matter what economic conditions may come next.

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About the author


Andrej Kovačević

Andrej Kovačević is the head of production at Melbourne based, independent digital agency, Amebae Online. Andrej's favourite topics to read and write about include marketing and the ever-changing landscape of Fintech.