Hey, small business owner! (Yeah, that's you) ... I want to help you work less, achieve more, and satisfy your customers more often.
Now, all I'm asking for is five minutes of your time, and there are five things that I want you to just think about over the course of the next five minutes. And if you actually acted upon these ideas, I'm pretty confident in suggesting you'd save a third of your daily operations expenses. That's five ideas in five minutes to save your business 30-percent.
- Clock how long it takes an average customer to place an order with your company. Does the process take three minutes? Five? Ten? Twenty?
- Identify the average volume of orders you receive on a given day.
- Time how long it takes for the customer to contact you to the point the work order's actually in the fulfillment cycle. What is that time?
- Count the number of people that touch, read, authorize, or acknowledge the receipt of the order.
- How does the customer find out about the status of their order? Is it a phone call? How often per each order? How does that customer follow-up or get more information on their order?
- How does your internal sales team/employees follow-up on the status of an order? How frequently do they do such checks, and how much time does it take them? Fundamentally, how many people does it take to screw-in your light-bulbs?
- How difficult is it to see the progress of the order from your information system? Does the system contain 100-percent of everything you need to know as a manager, or just 30-percent? Do you find yourself walking-around trying to find the answer to questions about jobs that isn't answered by the information system?
- Are order statuses confirmed by shouting through the hall or by looking something up? Do you have to be in front of a computer at the office to look it up, or, can you look it up where-ever you might be?
- Do you measure your defect and scrap ratios? What are those ratios?
- How much of your service is corrective labor? How much of your business' time is thrown at corrective action or fixes to satisfy the customer?
- How frequently do get shipping, distribution, and transportation wrong?
- What's the percentage of your products and services that score exceedingly high on customer satisfaction? Aside from understanding what you're doing wrong, do you know what you're doing right?
- What's the total turn-around time and expense from order placement to delivery? Can you categorize both time an cost per product line or service? And thus, which products and services are the most and least efficient? The most and least profitable?
- What's the ratio of orders that deliver on-time with the desired features promised to the customer? How frequently are you breaking your promises?
- What's the number orders delayed, rescheduled, paused, waiting, or back-ordered? How do execution delays affect your cash flow position?
5. Listening and Learning.
- How are suggestions from internal staff and your customers turned into policy and procedural changes at your workplace?
- Do you know most of these numbers and communicate them regularly to your staff?
- Does your company have a culture of learning from its mistakes and improving upon them, or, hiding mistakes and repeating them?
- How do you satisfy customers that you were slow in responding to, delivered a poor quality product, or disappointed upon delivery? Do you have a program for making customers happier?
- Each one of these things should be dashboard KPI's (Key Performance Indicators) that reflect the pulse of your business; that would reflect your management of the business. If you can't answer these questions, are you managing by facts or are you managing by assumption?
- If your computer system is incapable of yielding some of this data or is yielding inaccurate information, why are you relying upon it?
- If your computer system isn't automating a majority of these processes and enabling better transparency, faster and more accurate and more reliable business processes, and enabling your team to satisfy customers ... why own a computer system?
- If you or your staff aren't constantly learning from mistakes and missed opportunities, then you're likely repeating the same problems and creating a culture around mediocrity. Without metrics and practices like these, how is anybody in your organization held accountable - the least of which would be you.
- Some of these best practices could literally re-shape the relationship you have with customers and staff; if you're not building internal and external relationships to foster trust and community, you're constantly driving a wedge between efficiency and client retention.
If you implemented controls over these metrics, shared them with your staff, asked for their suggestions, instilled accountability, got an information system that provided useful information, and started listening to your customers, I guarantee you: 30-percent savings of operational expenses - bang! All because you started managing your business by objective facts rather than by convenient assumption.