Why not use your time to work “on” the business. 3 steps which could improve your business productivity.

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You've always been busy and not spent time to reflect and review the financials? 

Have margins been squeezed, customers always chasing you and it's taking longer than you planned to deliver goods or services?. 

Have you spent your time looking inward at your staff and potentially asking what are they're up to all day?

As Business owners we can often look at our employees when things don't go to plan. Blaming them for poor workmanship, wrong prognosis on an investigative job, delayed intervention, overspent on budget and ultimately this normally comes back to us through poor customer experience.

However, to prevent poor outcomes we must stop and learn that it's through the work transformation process, where we potentially waste time, materials, mistakes are made and hence margins get eroded.

Is therefore now a good time to take a good hard look in the mirror and learn it's our own behaviours, the business owners, that creates the working environment where our employees operate how they do...

I often hear, "if we could only recruit better skilled and experienced staff this will solve our issues". However, that's short term, as the chances are, within a few weeks or months the new recruits will be conditioned to our way of working and slip into our bad habits and behaviours.

So, how can your business overcome productivity and performance issues and set yourself up to be the business you set out to run and own?

1. Reduce non-productive time.

Many businesses wage costs are around 50% of their total sales revenue and their highest expense. Therefore, whilst everyone is busy, you need to focus on better utilisation of your staff and ensure they're more effective and efficient when delivering the services or making the goods you produce.

Say you can obtain a small 5% improvement in productivity over a year; This could put an extra £50,000 on the net profit of a £2million turnover organisation.

Do you agree worth having? Well-read on….

By reviewing and then improving work allocation, planning and utilisation of the existing workforce, then making some small changes you'll find that your business has a greater capacity to take on more work with the same workforce.

While the solutions are often quite straight forward, spotting the opportunities for change and implementing yourself can be difficult for a busy business owner. However, for now, make a start by creating productivity metrics. Establish a rule of thumb, what should be the average hours per job when your fee earners are working on paid work. Then establish what percentage of their working day they are fee earning and more importantly where they are spending the rest of their time?

Working with an electrical contractor we found the engineers were good in respect to doing the jobs on site, however wasted a lot of time, which was un-chargeable, on return visits because they never had the right material with them. Which was ultimately down to poor job sheets, allocation of work and communication with the material ordering department.

It's about uncovering all the bad costs within the workflow process and therefore focus on supporting the supervision to develop your team's capabilities. One tip is to share and communicate the key productivity challenges to your staff and then obtain off the coal face ideas. Make sure any quick wins are implemented and remember to follow up with any further improvements. Introducing small incremental changes can make a significant difference over time.

2. Introduce technology and innovation

Once you have the key working process and foundations in place, now is the time to consider investing in technology (not just machines); investigate software management systems and apps. There are many online account management and customer relationship management (CRM) systems, electronic point of sale (EPOS) and design and manufacturing (CAD, CNC) software. Consider resource planning (ERP) software, online customer booking systems, work and process planning, monitoring systems and dashboards.

Whilst there will always be an initial cost and ongoing fees, you'll find it will be cheaper and more reliable in the long run than recruiting an additional administrator or office/workload planner. If used correctly, you should find your current employees will have more time to do other tasks too. Ensure you provide on-going training, so your staff can use these systems effectively. A lesson I learned to counter staff resistance to new IT systems is to simply take away and discard the old systems, books, forms and any paper systems.

Another simple exercise to carry out is to introduce online time sheets. An example is an engineering business which I've been supporting who introduced online time logs (Tsheets) allowing the engineers to capture not only the hours worked and travel time, but also log any sundries used on these jobs and the data also helped us understand where there was idle time.

The engineers were then able to close the job, and in most cases, process the invoice, connecting with QuickBooks accounts software whilst still on-site and email it directly to the client.

The outputs being:

  • a)Instant invoice for the actual time taken including the materials and any hired ancillary equipment used.

Do you find you or your office team try to recall what work was done, look at a scruffy handwritten note or a faded time sheet and rack your brains to put some sense together to bill the customer? The chances are you will always under-charge and potentially create queries if this is the case.

b) As employees manage their invoiced hours, they become aware of their own non-productive time and either start up selling whilst on site (offering additional services) or move onto the next job much sooner.

c) Back in the office, the office/admin team will have more time to carry out other tasks, chasing debtors to improve cash flow, following up new proposals, securing more work and planning these jobs ahead in the diary.

d) You'll also have less queries on invoices with overall productivity improved.

The business I mentioned is now in a much better place and the owner's spending time out developing new strategic business relationships.

3. Restructure your business

If you have tried the above and gained all the quick wins, a more radical step is to rip up your existing organisational chart and start with a blank sheet of paper. The chances are your industry sector since you started your business will have evolved over the years. So, take a step back and think about where your business is today and where it is heading. What are the consumer demands now? What are customer demands likely to be in the future? What's the current and potential new routes to market?

You should plot and design a company structure which will deliver and be aligned to these future demands, along with understanding the key risks along the way.

Wish to discuss these options further, I am more than happy to meet up for a chat over a coffee. Just contact me on my mobile 07966 686112

I have supported multiple businesses to restructure, large and small. In some cases, it can be painful for the business owner, but being resilient to the process you'll emerged on the other side as a leaner, more agile and focused organisation. These businesses are now capable of maximising new opportunities with their competitors stuck in their old ways. In almost all cases, bottom line improvements have been obtained with fewer employees and through having a more flexible and engaged workforce, resulting in an invigorating working environment for not just the business owner but all their team too.

Nervous about taking the plunge?

Whatever your reason, just take some time to step back, look at the bigger picture and then ask yourself "Can I achieve my personal aspirations if my business continues to run as we are today?" If not, then perhaps it might be worth considering one of the above options.

What one of my clients says.

"As a family business we had continued to grow to the point where we now employ 12 members of staff within our office but had reached a position where we needed help with restructuring. After meeting Peter at one of his events, I decided to enlist his support".

"His help over the last couple of years has been invaluable, and Peter has helped me to reorganise the structure of the business. There was initially great resistance from existing members of staff, however we have managed to implement the changes needed without losing any of these valuable personnel. Peter has made a considerable contribution to this outcome".

"I regard the money we have spent with Peter as being money very well spent. I know the needs of each individual business will be different, but Peter definitely listened to my needs, the concerns of our staff, the structure of the business and then implemented a plan to take us forward, solving any problems or objections along the way the way. I would certainly have no hesitation in recommending the services that Peter offers".

Neil McSporran, Managing Director, Bay Travel & Bay Farm Tours, Morecambe.

Want to learn more, do get in touch?

For some helpful reading/audio, you can click here to obtain a copy of The E-Myth (Revisited) by Michael E. Gerber.

Click here for a This email address is being protected from spambots. You need JavaScript enabled to view it.

or contact Peter Fleming on 07966 686112

Visit my new website which I'm currently developing https://www.pfbusinessconsultancy.co.uk/

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