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Whether you run a product or a service-based company, inefficiencies in your small business can eat away at your bottom line.  While finding solutions to glaring problems is one solution, there are likely other areas of your small business that you are oblivious to.  Here are some simple tips to identify the most common inefficiencies in a small business and how you can make improvements.

1. Where is your time spent?  

It probably shouldn't come as a surprise that one of the top reasons that small businesses are ineffective is a lack of focus.  If you are working 12 hours a day, six days a week but feel like you aren't getting much accomplished, there's a problem.  One of the best ways to address this is to begin tracking your time - every minute and every task.

I use the Timetracker App that is integrated with Freshbooks, but you can download any timetracking App, and many are free.  If you're App-averse, try pen and paper.  Develop a discipline of tracking every minute of what you're doing during a work day and commit to doing this for one month.  The end result is that you'll receive a clear picture of what you are dedicating your time to, and you will notice a side-benefit of becoming better organized during the course of your day.  

This is an important task so don't skip it!  There is a big difference between what you "think" are inefficiencies vs. what actually materializes.  Only the data in black and white will reveal the truth.

2. Identify and address your patterns.  

Now that you have some solid data (see #1) to work with, you can identify those glaring holes, patterns, and opportunities in your work day.  Are you spending a lot of "free time" helping customers but not getting paid for it?  If yes, is there a way to "productize" this?   

For example, by tracking my time, I realized that I was devoting a lot of resources to helping new businesses get established by doing all sorts of things that did not fall under the scope of small business web design or our original quote.  This is typical and natural when building a small biz website for someone because nothing happens in a vacuum, and if you don’t have your ducks in a row, things can go pear-shaped quite quickly.  

There are not only essential elements that go into making a small business website successful, but if your overall business processes and set-up aren't in good shape, the business and its clients will feel the pain. Here's one small example: if you are selling branded products online, have you checked to see if you need to register with the FDA, and do your labels match the current labeling laws?  Two important things to check BEFORE you print your product labels!

As much as I love being helpful, my extracurricular involvement in these matters was seriously affecting my bottom line.  Since I was able to spot an obvious pattern and my help to these businesses was always appreciated, I decided to "productize" some consulting packages for small businesses that need help with such things as starting a new business or promoting a new product/service.  Now, the time that I spend providing this support to clients is billable.  Lulu Web Design remains profitable and sustainable, clients get what they need, and everyone wins.

Look for similar patterns in your daily activities.


3. Create workflows for your business.

Most businesses are built on a series of repetitive actions.  There are reports due, emails to send, meetings to hold, and data to review.  Where you can, create workflows, templates, and checklists for these items so that they are simple to replicate.  If some tasks can be automated, even better.  Workflows should be logical, efficient, and not so rigid that they can't be adjusted when conditions change.  If you have a management team or a partner, involve them in this process.  Here is an example of several useful workflows:

4. Follow the money!

Most companies don't go into business to deal with accounting or do math all day long but keeping up with the financial side of owning a small business is essential to survival.  From invoicing to expense-tracking to daily accounting and dealing with the IRS, it's a wonder that you ever get to speak to your customers!  Fortunately, technology has taken a lot of the headache out of many of these tasks, and your first order of business is to find the right tools and get your financial system established.

QuickBooks is the gold standard for many small businesses when it comes to accounting software, but there are other solutions to choose from as well.  Here at Lulu Web Design, we use Freshbooks. Whatever solution you choose should be flexible enough to handle such things as invoicing, payroll, credit card processing, expense tracking, inventory management, and financial reporting.  Once you have a system set up, use it religiously to plan, budget, and run your business.

5. Create a Personal Routine.

We all have a personal routine that we're most comfortable with, but have you taken the time to identify yours? For example, I am at my most creative in the morning.  By 2:00 p.m. each day, I know that it is pointless to start working on a new website design because I just don’t have enough creative energy for it. Despite the obvious, it took me a while to realize this and I would sit at my computer, drifting between looking for inspiration, responding to emails, and zoning out completely.

Because I recognize this, I now have organized my day so that all creative work is done in the morning, and development, client meetings, and admin are performed in the afternoons. I also dedicate certain times of the day to check email (and yes, admittedly, my personal Facebook page!), but I leave these applications CLOSED at all other times. My phone remains silenced during the creative period.  

Take some time to consider what personal routine best suits your work style and personality.  Are you a morning person?  Or, do you get your most productive work accomplished in the evenings?  Make a list of all of the things that you need to get done each day (or week) in both your work and personal life.  If some of those are not time-flexible, make note of when they need to be accomplished.  For the remainder of the items, lump smaller tasks together in batches to avoid interruption and slot in your most difficult tasks for the times of the day that you are most productive.  Test out your routine and make adjustments as needed.

6. Review, analyze, and adjust.

Whether you are working alone or with a team, it's important to continually take stock of your progress and make adjustments where needed.  Too often, major issues don't just "appear" but were slowly accumulating for many months and could have been addressed much sooner with a few minor modifications to processes.   

To that end, make a commitment to dedicate one day each month to review how things are going with your business.  Go over key financial statements, sales reports, and projections.  If possible, get feedback from clients about your products or services.  Those minor adjustments that you make today could be the keys to your business' success in the future.

Are Inefficiencies Affecting Your Small Business Bottom Line?