5 Small Business Operation Hacks
Managing your business operations is centered on having well-defined processes and procedures. The strategic importance of a business’ operational systems ensures long-term successful business performance. In fact, businesses that don’t often fail within the first 3 years.
In other words — failing to pay attention to your business operations is like trying to download new computer software without going through the tutorial first. Yes, you can fumble through it, but if and when something is not right, you won’t know what’s wrong or how to address the issue.
Operations management entails formulating, planning, executing, and overseeing the operations that help convert business resources into services and products. It’s an essential part of a healthy business strategy. But did you know there are 5 common operational areas many small business owners skip or overlook? Yep, according to a recent study, these examples can possibly put you out of business or set you back with a huge financial price tag.
Business owners that fail to invest in their day to day management and administration subject themselves to essential business risk. Many small business owners skip or skim on investing in these areas and they include supplier management (including vendors and subcontractors), contracting, resource management, and financial management. Each of these areas deserves equal amounts of attention and are essential parts of your business system. If these areas are neglected you are open to unanticipated risk which will cost you dearly down the road. Whether it’s full-time or part-time, invest in these areas to keep your business running smoothly.
Business Performance Assessment and Reporting
One of the more common operational issues most small businesses have is the lack of internal process and systems to accurately collect and report on the performance of the organization. You need to know where your business stands within a given moment, you need to be able to collect data and convert it into a report form. What tools are you using to ensure performance? Performance management cannot be achieved without a good reporting system. When setting up your operational performance reports, you should collect and track areas like employee performance, stock and inventory, sales performance, assets, and product performance in order to obtain an accurate performance report.
Human Resource Management
Human Resource Management is an important part of operations management for businesses of all sizes. Many small businesses don’t have an HR system at all. Having someone focus on HR that can properly manage and use the human capital, aid in budget control, oversee training and development for the organization’s current workforce, help resolve workplace conflicts, and encourage or implement performance improvement strategies.
Good HR management is vital to maximizing productivity and developing a company’s strategy. It helps ensure good employee satisfaction and communication as well as build a good corporate image. I would highly encourage you to outsource this area that way you ensure you are in compliance with all the laws and regulations around human capital.
Customer Acquisition and Retention
Acquiring new customers and retaining existing ones is essential to healthy business growth. Small business owners need to weigh the costs associated with customer acquisition and retention against the profit generation. Establishing cost-effective customer retention strategies can be key to maintaining business productivity.
Customer acquisition costs are often significantly higher than costs associated with customer retention practices. Small business owners should focus on low-cost applications when available. That means devising detailed acquisition strategies that nurture your current customer. Try customer surveys to determine what is working and not working for your customer base. Once you receive your feedback, make the necessary improvements to ensure your current customers are satisfied. This is much easier and cost efficient than trying to acquire a new customer.
Information security is very often ignored by small business owners and frankly, it’s due to ignorance around the subject. The reality is digital data theft can be much more costly than physical theft for businesses nowadays. Plus many small businesses think they are not a vulnerable as a larger outfit. The truth is – that’s not true! Hackers can steal ANY size company’s intellectual property, customer credit card information, funds from company bank accounts, as well as theft of employee or customer personal identification information. Hackers can also shut down critical information systems or block the company’s access to vital websites and services.
Protecting the safety and data of your business shouldn’t be left as an after-thought. Take preventative measures to reduce the risks of theft, fraud, injury to or by your employees, or damage by putting someone in charge of managing both your company and customer’s data systems will allow you to avoid and anticipate data breaches, improper practices, and system issues early on. At a minimum, you should have digital systems that provide proper digital protections, backup and security measures to reduce your data risk factors – remember every business is at risk!