How Businesses Can Lower Costs and Increase Productivity
Small businesses are essential to the economy of the United States. This is often the case worldwide. Most businesses are small businesses, making up 99.7% of all companies, and accounting for 48% of private-sector employees. Furthermore, most new jobs originate from the small business sector. However, according to the Small Business Administration, just 38% of small companies survive. Therefore, the economic stability of all areas depends on the small business community and their respective success.
Entrepreneurs and small business owners must seek education and knowledge in management. A large percentage are experts in their respective fields but may lack an understanding of how to run a business. This is understandable, because company proprietors are busy running the day-to-day operations, and may lack sufficient time to seek training. In a 2011 study by Elizabeth Walker, Janice Redmond, Beverley Webster, and Megan Le Clus titled Small business owners: Too busy to Train?, the researchers found that although the perception of small business owners is that they are often too busy to seek training, this is not the case. The results of the study suggested that if owner-managers can apply the concepts of the training to their current situation, and the training is delivered in a convenient manner regarding location, days, and hours, attitudes toward training tended to be positive.
As globalization continues to expand the reach of companies of all sizes and competition grows, smaller organizations must look to become leaner and more efficient. Often, there is just so much that a company can do to lower prices before the act of selling becomes unprofitable. When consumers expect lower prices, the mathematics of operational expenses comes into play as the costs of running the company will play a factor in whether the operation is profitable. Therefore, smaller businesses need to focus on developing efficiencies and increasing productivity to lower operational expenses. However, owner-managers need to understand how to calculate these numbers to measure costs and maintain efficiency.
Increases in productivity are often obtained by introducing technologies that can help lower costs and increase efficiency in certain processes. These implementations do not need to be complex and can include simple technologies that are always available. For example, many organizations are lowering operational expenses by allowing employees to telecommute, thus reducing costs in space, infrastructure, and electricity, among others. A small investment in video conferencing technologies mixed with additional services such as virtual private networks connections, remote access software, and call forwarding can reduce expenses a great deal. Some experts also suggest that telecommuting strategies can also boost employee productivity.
Once a business reduces costs by implementing simple technologies, they can begin to expand their reach by adding additional revenue streams or sources of income. For instance, many organizations have websites but do not market or improve results by taking advantage of the different channels to promote products and services such as Facebook or Instagram. Investing in simple ads can help create new sources of revenue. Furthermore, improvements to their website’s content and structure can enhance search results in search engines such as Google or Yahoo. Some businesses have a difficult time implementing these website structure enhancements; nevertheless, organizations such as SEO agencies Toronto can assist businesses in improving search engine results by optimizing websites.
Whether businesses are looking to learn how to implement search engine optimization, introduce niche-specific ads to Facebook, or understand how to reduce operational costs, owner-managers need to be open to learning new techniques and technologies to remain competitive and to maintain a high level of productivity. Those organizations that can continue learning will sustain a higher competitive level.