Imagine everything runs incredibly smoothly in your business.
Customers are raving about your brand. They are unpaid evangelists who share your products on social media and attract even more shoppers.
Your team is happy and productive while enjoying a work environment everyone can thrive in.
You stay on top of your cash flow and generate maximum revenue while incurring minimal costs.
Sounds fantastic, right?
It may seem hardly possible for a small business to quickly grow and become profitable.
However, success is within reach with the help of operational efficiency.
So sit down and look nowhere else, because today’s post is the last one that you’ll ever need to improve operational efficiency and boost revenues.
Table of contents:
- What is operational efficiency and why is it important?
- 7 techniques for improved remote team operational efficiency
1. What is Operational Efficiency and Why Is It Important?
The concept of operational efficiency encompasses the practice of delivering high-quality services with less time, reduced expenses, and fewer resources involved in the process.
In layman’s terms, operational efficiency is a metric that measures the profits generated in relation to operating costs.
The greater your operational efficiency, the more profitable your small business is.
We’ll have a more in-depth look at the benefits of operational efficiency, but perhaps we should clear up one common misconception: efficiency is different from productivity, even though they are used interchangeably.
Essentially, efficiency is about doing something with reduced operating expenses, while productivity is about achieving more using the same resources.
For example, if you can write a 600-word blog post in one hour and a half instead of two hours (without affecting quality), you have increased your efficiency.
On the other hand, if you can write a 600-word blog post today and a 700-word blog post tomorrow, the second day was more productive.
Put simply, productivity is more focused on the quantity of work, while efficiency is more focused on the quality of work.
The difference matters because it impacts how you structure and perform your day-to-day operations.
While it is important to be aware of the difference between productivity and efficiency, you should know that, in most cases, efficiency matters more than productivity.
According to Thrive Global, efficiency wins over productivity because being productive does not equate to producing high-quality work. While on the other hand, efficiency means achieving more with less without sacrificing quality.
Operational efficiency can bring great benefits for your small business – especially if you work remotely and need to tailor all of your operations around a seamless working experience.
For example, operations efficiency enables you to reduce costs and errors while improving customer satisfaction and the workforce.
It also provides your business with greater adaptability to tackle unexpected challenges, such as those posed by the Covid-19 pandemic. This is because smooth running operations help you optimise your business’s time, money and effort so that you can have more resources to navigate change.
By improving operational efficiency, you can ensure that your small business remains competitive and profitable.
That being said, let’s explore 7 proven approaches to increase operational efficiency for your remote business.
2. 7 Techniques for Improved Remote Team Operational Efficiency
- Identify inefficient processes
Any business has some process inefficiencies. Even though they might non be affecting your business right now, you will eventually have to deal with them.
Remember, small problems will always get bigger.
So, you may want to review and analyse current processes to look for inefficiencies.
Most of the time, the red flags of inefficiency are manual processes, unnecessary meetings, process drifts, wasted inventory due to overproduction, information that isn’t immediately available, and duplicate work.
- Provide access to information
Ensuring that each team member has consistent and secure access to information is crucial to increasing operational efficiency.
According to The Workforce Institute, employers are increasingly expected to provide fast and easy access to information that helps employees.
So, providing your team members with the ability to access and process data helps you build a culture of trust that yields higher engagement, higher efficiency, and, ultimately, higher profits.
- Streamline remote team communication
While email is still dear to our hearts, we must admit that there are more efficient ways to communicate remotely.
All remote teams require a fast and efficient communication tool that supports streamlined collaboration even across time zones.
Streamlined communication facilitates the free flow of information among team members and reduces conflict and misunderstandings.
You can read more about remote team communication tools here.
- Measure performance
It’s hard to determine your levels of operational efficiency if you aren’t measuring them.
Knowing how different areas of your business are performing helps you identify your company’s strengths and weaknesses and determine the factors that need to be changed.
As a general rule, you should measure both financial and non-financial factors.
When measuring your financial performance, you might want to consider factors such as cash flow, working capital, cost base, overdrafts, and loans.
When measuring non-financial performance, it’s common practice to look at factors such as customers (e.g., number of customers, churn rate, etc.), customer service (e.g., number of complaints, reasons behind customer complaints, etc.), employees (e.g., how happy they are, work quality, etc.), and market share (e.g., increases or decreases in market share).
- Outsource non-core activities
Engaging with an external service provider to perform non-core business activities allows you to focus on your niche area and deliver results through quality.
In simpler terms, outsourcing non-core activities enables you to improve the performance of your core activities.
Picture the following scenario: as a small business owner, you want to be as hands-on as possible and do everything yourself, including answering your own phone.
However, answering your own calls can be disruptive as it takes away time that could have been spent on more meaningful tasks (not to mention that you risk missing calls and customers).
On the other hand, outsourcing all of your phone answering duties to a virtual receptionist helps you make the most out of your time and improve performance by actually focusing on your core tasks.
- Make remote work permanent
Possibly the top technology trend to improve operational efficiency in your business, remote working has become the norm after the Covid-19 crisis.
So, if you want your small business to survive and thrive in a post-Covid world, it is essential to equip yourself for a work-from-anywhere future.
For example, a virtual office is an agile work environment focused on remote working, flexibility, and mobility. It provided access to the conveniences of a professional office without actually paying for an expensive, obsolete physical office.
Given your business has the ability to permanently operate remotely, a virtual office is the most efficient and cost-effective way to leverage modern technology in order to reduce costs while also improving operational efficiency.
- Effectively train employees
Regular training and cross-training on all relevant systems and processes are key to driving operational efficiency.
Not only does adequate training help you ensure smooth operations, but it can also help you reduce employee turnover. This is because employees who get opportunities to learn and improve their skills are more likely to stick around.
Outside of organising regular cross-training for your team members, you can also provide them with standard operating procedures (SOPs) to clearly explain the steps that need to be taken to complete a task.
Make sure you also communicate the purpose and value of each role within the company.
Encourage each team member to ask questions and share feedback. Also, it’s good practice to schedule post-training check-in meetings to follow up with them and assess how they are performing in the new role.
Conclusion: In today’s vying business market, operational efficiency has become a critical success factor.
As businesses accelerate at a fast pace, everyone wants to do more in less time to stay ahead of the game.
Use the tips in this post to achieve sustainable efficiency in your operations and cut expenses without sacrificing the customer experience (CX) or your ability to grow and expand.
Otherwise, you risk missing out on an effective strategy to boost profitability and ensure your business’s long-term viability.
Does the operational side of running your business feel like a headache? B2B HQ can provide you with the right tools and systems to make your business operations a breeze while also reducing expenses and improving your customers’ perception of your brand. For more details, do not hesitate to contact us.