When was the last time you took a step back and asked:
Is this the best and most efficient way we could be doing _______ (fill in the blank)?
I bet it has been a long time. Maybe never. It is one of the most important things you can do, and it should be a priority at least once per quarter.
All businesses are ultimately judged by information on two pieces of paper. One showing money coming in (Revenue), and one showing money going out (Expenses and COGS). Most business owners focus on revenue. “I need more customers”, or “I need to charge more for my product/service”. Do you realize a 10% reduction in expenses is probably much easier to find and implement than most revenue increasing actions you could take?
Before you go changing your marketing strategies and investing in more programs, you need to take the time to flush out and eliminate waste and inefficiency in your current operations. In other words, eliminate the possibility that you will take two steps forward and one step back.
Profit is increased two ways. Increase revenue, or decrease expenses.
So how do you reduce expenses? Through analyzing your operations. Every process, from your opening procedures to bank deposits to how you make and receive phone calls in the business can be analyzed and improved. That improvement process leads to more profit. It has too. Finding $1 per day in process improvement is $365/year. Multiply that by 10, or 100 per employee, and you are saving real money.