Ways to improve the efficiency of small businesses.
I want to repeat this already repeatedly, that all the funds saved from improving the efficiency of all components of the production process will replenish your profits. Therefore, you should use all possible ways to improve the efficiency of your business.
It should also be said about the interconnectedness of many factors of cost reduction among themselves. For example, increasing the number of parts manufactured at one time, we reduce the complexity and get the opportunity to reduce the price of the material. Or by modernizing the technological process and getting rid of some equipment, we, making a profit from the sale of equipment, reduce energy consumption.
I want to illustrate all of the above with an example from my practice. One of the enterprises that I created was a furniture factory that specialized in the production of upholstered furniture. I created it, as they say, from scratch and gradually increasing production, brought it to quite decent size and a fairly efficient enterprise.
Ways to increase efficiency from our own practice.
Initially, my business produced analogues of already known products. But from the very beginning, the main emphasis was on the specialization of production processes. What usually consists of upholstered furniture, for example, a sofa. First of all, from a wooden frame, spring blocks, polyurethane foam gaskets and upholstery from fabric or leather, armrests.
So, initially, I singled out the manufacture of frames in a separate workshop and began to produce them not only for myself, but also for other factories that did not have a carpentry workshop. And sometimes for other factories it produced much more than for itself. In a short time, this workshop grew from one employee to 5-6 full-time employees and was the most profitable in the entire enterprise.
Partner_Business_ Efficiency Several types of frames for various sofas were produced. At that time, frames copied from analogues required seven different types of wood and several expensive machine tools for their manufacture. We have changed the design of all types of frames.
This allowed us to produce all types of frames from just one or two sizes of wood, to simplify the process by eliminating three labor-intensive operations from it, and to sell three rather expensive energy-intensive machines. Moreover, the main requirement for the frame – its strength, only increased. After this innovation, we had no cases of broken frames. As you can see, a change in design made it possible to improve all performance indicators and, naturally, increase profits.
Examples of reserves for improving the efficiency of small businesses.
In addition to my own experience in improving business performance, I want to give a few more examples. I think that with concrete examples it is easy to see that there are no trifles to increase business efficiency. Any, even seemingly insignificant, and sometimes simple action, can significantly increase the efficiency of small businesses. The only problem is that most small business owners do not pay any attention to minor improvements in their business. They don’t even bother to think which ways to improve the efficiency of small business are almost on the surface.
I will give just a few examples that are encountered at every step and how, by correcting simple mistakes, you can significantly increase the efficiency of your business.
Wrong or unspecified task setting for employees.
And not only skilled workers. I have seen in some businesses how long and painfully the workers thought what was required of them, and then long and painfully searched for materials and tools to carry out the assignment. At least half the time spent on the task wasted idly. And how many such days are in a month? It is easy to calculate the loss for a month and for a year. And if the businessman considered this, he would not complain about the fate and inefficiency of his business.
The truth seems to be common – tasks must be issued specific and provided with the proper resources for their implementation. An employee at his workplace must fulfill his immediate duties.
Holding lengthy meetings or conversations related to production.
Some businessmen think that by holding meetings with a sufficiently large number of employees, they increase their status and their authority. When you don’t call such a business, the answer is almost the same – sorry, I have a meeting now. I even started to think that it was an excuse that they did not want to talk. But then he was convinced that they really endlessly confer. And they don’t get how much they lose on this. I find small business meetings a complete waste of time. As far as I remember, I have never held a meeting in any of my business. And I think that I saved a lot of money on this. In small business, meetings, all kinds of meetings should be excluded.