Profitability is what enables a business to grow. When you increase productivity and learn how to (sustainably) do more with less, it significantly impacts the bottom line. In the past, productivity has come at the cost of putting more hours into the business. According to Our World in Data, in 1950’s Australia, the average hours worked per week was 44.4, whereas in 2017, this number came down to 36.4. How we work and the technology that supports us have evolved. Some ideas of what creates productivity, however, are still being challenged. A critical question business owners and leaders need to ask themselves now is whether “burning the midnight oil” is increasing your small business productivity or simply creating burn-out?
It’s easy to get caught in a productivity quicksand. You can see the outputs you want to achieve, the destination ahead. On the way, however, there are the obstacles dragging you down – the day-to-day tasks and firefighting issues that need to be actioned. As you wade through these issues, more tasks pile on top. Before you know it, you feel like you’re in a never-ending cycle of “doing” instead of “achieving.
In this guide, we’ll take a look at the ideas to refocus and reassess what’s making you and your small business truly productive and what could be trapping you in the quicksand.
Why longer hours aren’t the answer
Working longer hours doesn’t always translate to productivity increases. A study from Stanford University by economics professor, John Pencavel, found that productivity per hour declines sharply after a 50-hour work week. After 55 hours, productivity drops so much that putting in any more hours would be pointless. Additionally, when people work up to 70 hours a week, they are only getting the same amount of work done as those putting in 55 hours.
Ford Motor Company also proved the “burn-out” effect of long work hours through a series of studies in the 1990s. These studies showed that for every additional 20 hours of work above the recommended 40 hours per week, an increase in productivity was only seen for three to four weeks before that productivity reversed and dipped below normal levels.
Consistently working long hours can make you and your employees less effective in the long run. Productivity declines, and more hours are spent catching up on neglected tasks. “Work-life balance” is a buzzword being used a lot in recent years. What it really means, though, is understanding the threshold of productivity before it turns to burn-out.
A different mindset in the new normal
In 2020, the way we work changed. Due to lockdowns and social distancing restrictions, many businesses were forced to adapt to remote work conditions. As a result, companies have now re-evaluated how the new normal of workplace productivity should look.
Employees are also re-thinking their motivations and what they value in a workplace. The U.S. has already witnessed what was termed the “Great Resignation”. A record 4.3 million workers left American jobs in August 2021, and this trend of leaving jobs is expected to follow in Australia in late 2021 and early 2022. Microsoft also cites that over 40 per cent of the global workforce will consider leaving their employer this year. And while hiring is back above pre-pandemic levels, how modern workplaces should be structured to attract and retain top talent is still undergoing a major transformation.
As businesses step into the post-COVID normality of workplace flexibility and demonstrate their value to employees (instead of the other way around), they will need to balance between what worked previously and what will amplify future success.
To increase long-term productivity and do more with less, employers must evolve workplace cultures and values to meet new expectations around the employee experience. The imperative is to support that experience in a way that also improves productivity. Factors such as distributed work environments, better training to create higher outputs, and automation are now essential ingredients to productive workplaces that help employees do more with less.
How to support a distributed workforce
Remote work, virtual meetings, the hybrid workplace, and working from home aren’t new ideas. These trends did, however, become commonplace during the global pandemic. In many countries, people have returned to physical workplaces. This return is looking quite different to pre-pandemic days, though. Talented employees are actively looking for roles that offer remote and hybrid (remote and in-office) conditions. If you’re still not set up to support a distributed workforce, now is the time to get with the times.
To help your remote workers perform at their most productive, you need to have a plan for inclusion, collaboration, flexibility, and accountability.
Inclusion
According to a recent McKinsey study, Employees who feel included in more detailed communication are nearly five times more likely to report increased productivity. In addition, business leaders who communicate employee updates more frequently – sharing what’s already decided and communicating what is still uncertain – can boost employee motivation and productivity.
Collaboration
Remote work can increase collaboration when using the right tools for the job. Applications like Slack, Trello and Basecamp make company-wide activity accessible to everyone.
Employees can also search through records if they missed something or want to make sure they understood communications. File sharing is faster and easier, as is initiating ad-hoc group conversations.
When it comes to collaborating about (and with) customers, cloud-based CRM and ERP systems such as NetSuite create a single view of all interactions. Regardless of where employees are located, everyone has 360-degree tracking and reporting on customer activity and experiences. Real-time collaboration and updating of information mean customers also receive consistent experiences – from every employee.
Flexibility
Not everyone works the same way – and let’s face it, the days of the nine-to-five job are over. Most of us are continually connected and reachable by messaging app, email, or phone. Traditional working hours no longer apply in the digital world. We’re all more flexible when it comes to being accessible.
Particularly for parents, carers, or simply personalities more suited to a distraction-free environment, work location is also becoming increasingly important. A study by Stanford found that working from home increased productivity by 13%. The increase was due to more calls per minute attributed to quieter and more convenient working environments and working more minutes per shift because of fewer breaks and sick days. In this same study, workers reported improved work satisfaction, and attrition rates were cut by 50%. With employees embracing this new way of working – and being more productive – it makes sense for business leaders to embrace it.
Accountability
To maintain accountability, you need to communicate effectively. When it’s clear what you expect from people, it holds them accountable. In turn, that accountability generates incentive to make sure tasks are completed on time and to expectations.
Regular team meetings provide a predictable cadence that helps employees stay on track and know when updates are needed. Especially with distributed workforces, quick daily check-ins can strengthen accountability, offer the chance to check understanding, and raise any issues straight away. Other benefits of this approach include improved communication, collaboration, and the opportunity to increase collective knowledge.
Better training to create higher outputs
Lean Six Sigma is a process improvement methodology that uses team collaboration to reduce variation and increase performance and outputs. One aspect of this method that every business leader can apply is the consistency of business process training.
With consistent processes and effective onboarding, you can remove potential “wastage” from business processes. This wastage can include:
- Time taken for employees to figure out the right processes.
- Fixing errors that stem from inconsistent processes.
- Bottlenecks created by employees needing to engage other resources who know the correct processes.
To build consistency and increase your outputs, proper training is crucial for everyone in your business. The right business management systems can significantly improve your business process training. NetSuite is one solution that manages all core company functions from one application. Employees all gain role-based access to the same system and see one central source of data. With everyone using the same platform, collective system and process knowledge is streamlined, people can learn faster, and you can consistently drive higher outputs.
Put the Pareto principle into practice
The Pareto principle, more commonly known as the 80/20 rule, dates back to 1906. Italian economist, Vilfredo Pareto, observed that 80% of the wealth and land in Italy was owned by only 20% of its population.
80/20 distribution was thereafter noticed in a variety of situations. Today, it has evolved into a definition of 80% of outcomes being driven by 20% of efforts. It’s also a constant reminder to focus on the 20% of the workload, clients, or sales that generate 80% of productivity and revenue.
To make effective use of the Pareto principle, analyse your business inputs and outputs. At a basic level, this will include:
- The 80% of leads that come from 20% of lead sources.
- The 80% of new business that comes from 20% of sales efforts.
- The 80% of revenue that comes from 20% of customer accounts.
Also, analyse where the principle is happening in reverse. For example, where 80% of time is being spent on tasks that only produce 20% of the total output. Many small businesses build up inefficient processes over time. These are the 80/20 processes you want to identify and rectify.
When you apply the Pareto principle to your business, you can refocus your team on what matters and get more done with less effort. Motivation and productivity will also increase as you see higher outcomes from the same amount of resources.
Play to your strengths, outsource the rest
In a small business, you’re constantly learning. There’s so much to do that you and your team are used to wearing many hats. It’s a brilliant environment for rapid learning and personal growth. Part of that learning and growth process, however, is uncovering your strengths and weaknesses.
It’s impossible to be good at every business discipline. And, the results are minimal when you spend time and effort working on tasks that aren’t in your skillset. Remember that 80/20 rule? Don’t get caught in the trap of spending 80% of your time producing 20% of the results you need.
We’re living in a time when hiring specific talent for your business needs is no longer a lengthy process. Freelance resources are everywhere, and using them brings a range of benefits, including:
Reduced business risk
The hire of full-time resources makes sense when you have a constant flow of work. But say you have a branding and design project that only takes a short time to complete. A full-time design resource needs to be engaged full-time. By outsourcing the work rather than filling a permanent role, you’re paying only for the time that’s needed. You’re reducing the financial risk of under-utilised full-time resources and the risk of having that full-timer lose motivation when they’re not being kept constantly productive.
Instant expertise
Small businesses often hire resources that have multiple skill sets. But every “jack of all trades” needs to brush up on their expertise for specific tasks when the situation calls. When you outsource, you can find resources with the exact skills required to work through a project quickly. You can find highly qualified temporary resources who work on those same types of tasks day in, day out. They can hit the ground running and apply instant expertise where it’s needed.
Scalability
Demand can change quickly, as we saw throughout COVID-19. When you need to meet rapidly increased demand, the hiring process can be the bottleneck that slows things down.
Once you’ve hired a permanent resource, you also need to keep the same or increased activity level to ensure your resource is constantly engaged. In contrast, you can scale up or down with demand when outsourcing specific activities and tasks.
Sites such as fiverr.com, upwork.com and freelancer.com have resources available in just about every discipline you can imagine, such as project management, virtual assistants, marketing, design, product research, sales, the list goes on. Review the 20% of tasks your in-house team generates 80% of outcomes from, and consider whether you can outsource the rest.
Identify and track valuable metrics
You can’t improve what you can’t measure. When you identify the metrics most important to your business, you naturally pay more attention to enhancing tracked outputs over time.
Critical metrics that small businesses should consider tracking and reporting on include:
Qualified leads per lead source
How many leads you’ve acquired, and from where they came. These metrics give you a good understanding of which lead generation tactics are working. This also helps you figure out which channels warrant the most focus and energy.
Lead to prospect and customer conversion rates
The percentage of qualified leads that have become prospects and opportunities, and the percentage of prospects that became paying customers. These metrics give you a strong indication of how effective sales efforts have been in moving potential customers through the pipeline.
Cost of customer acquisition
Calculated by dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent. The Cost of Customer Acquisition (COCA) lets you understand whether your marketing spend is sustainable compared to your average sales revenue per customer.
Sales revenue
Calculated by adding up all the income from customer purchases, minus the costs associated with returned or undeliverable products.
Customer churn and retention rates
The percentage of repeat customers you lose within a specified period (churn rate) business with your company and the percentage of repeat customers you retain within a specified period (retention rate). Your churn rate helps measure the number of customers lost over time, whereas retention rate measures your ability to keep customers purchasing from you over time.
Cost of Good Sold (COGS)
The total of direct costs and expenses involved in producing and delivering goods and services. Your COGS does not include indirect costs like employee wages or sales and marketing expenses.
Gross profit margin
Your gross profit margin is calculated by subtracting COGS from your sales revenue. As a formula to show your GP percentage, use Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue x 100. This percentage indicates how successful your business is at generating revenue while keeping the costs down.
Operating cash flow
The amount of cash generated by your company’s normal business operations. Cash flow is the lifeblood of every small business. Operating cash flow indicates whether your company is making enough positive cash flow to maintain and grow operations. This metric gives you a sense of how much cash can be spent in the immediate future and whether to reduce spending.
Budget vs. Actual
The comparison of your company’s planned financial transactions for a given period (the budget) to the final financial results of that period of time (the actual). These metrics allow you to compare the overall difference between budget and actual, and delve into how specific business areas have varied from budgeted amounts.
Cloud-based ERP systems, like NetSuite, provide role-based dashboards where all these metrics can be tracked in real-time. These dashboards include live report snapshots, KPIs (Key Performance Indicators) to track how metrics are performing compared to expected results, and reminders to prompt action when and where it’s needed.
NetSuite also automates key reports to be sent directly to your inbox at set intervals. This functionality helps business leaders keep a regular cadence to reviewing business outcomes – without manually pulling data each time.
Live dashboards and automated reporting on crucial business metrics and KPIs can help you do more with less and spend that otherwise manual reporting time on more strategic initiatives.
The many ways to automate
Many growing businesses struggle with how to scale. When operations ramp up quickly, the issue can compound. The amount of time your company spends on low-value, manual tasks hampers its ability to work on the strategic, revenue-generating initiatives that keep it scaling further. Automation, however, supports rapid scaling by taking care of repetitive, time-consuming tasks.
Automation isn’t just for enterprise organisations anymore. Numerous software applications bring accessible ways to automate tasks. For example, email auto-replies aren’t just for out-of-office notifications. They can also be used as automated acknowledgements of customer queries. For example, an immediate response that sets customers’ expectations of when they will hear from you can eliminate additional calls and emails to customer service.
Social media scheduling tools like Sendible or CoSchedule will help you stack up, schedule and automate publishing across different social channels. With these tools, you don’t need a resource to manually create each post at the time it needs to go out. It’s a good idea to test and identify the ideal post times for your audience first. Then, set your social posts to go out automatically at the most optimal times.
With programs like Tidio and LiveChat, you can automate responses to common questions your website visitors may have. You can provide links to website content, set up chat sequences to gather information, and more. This takes the hard work out of manning live chat programs or answering calls for these queries.
Small business ERP systems, like NetSuite, are leaders in automation. These systems bring all core business data together into a single platform. This consolidation of data enables you to build automation across the business to reduce manual data errors, save significant time, and boost your outputs without additional resources.
With an ERP system, you can automate repetitive tasks throughout supply chain, inventory management, finance, sales and marketing, project management, and more. You can set minimum and maximum reorder points, for example, to ensure stock stays at optimal levels. Support functions such as case management, issue tracking, warranty registration and repair can also be automated. The list goes on with countless other ways to do more with less and strengthen process consistency. Read more about how a NetSuite ERP system can automate tasks across your business.
Equip your business for success
By increasing your productivity and figuring out how to do more with less, you can maximise your profitability. In turn, that profitability will keep your small business growing continuously. As we’ve seen, longer hours certainly aren’t the answer to becoming a more profitable business – and in fact, can take a serious toll on productivity.
Now is the time to re-evaluate your business mindset and evolve your workplace culture and values to meet new expectations around the employee experience. A distributed workforce that focuses on inclusion, collaboration, flexibility, and accountability can make employees more productive and stay with the business for longer. Better employee training can also drive improved outputs.
Analyse where you’re spending 80% of time to create only 20% of your outputs and refocus on activities that enable you to create higher outcomes from less effort. The outsourcing model can save you considerable time on tasks that aren’t within your core skill sets and allow you to scale while reducing business risk.
Keep a close eye on critical business metrics that show where you can improve over time, and look for opportunities to automate low-value, repetitive tasks.
Small business leaders and their teams don’t need to feel caught in the productivity quicksand anymore. With the right processes and systems in place, you can increase productivity and do more with less – without burning the midnight oil.
Talk to an ERP expert now about how ERP technology can help you streamline and automate your business to boost productivity and do more with less.
It’s easy to get caught in a productivity quicksand. You can see the outputs you want to achieve, the destination ahead. On the way, however, there are the obstacles dragging you down – the day-to-day tasks and firefighting issues that need to be actioned. As you wade through these issues, more tasks pile on top. Before you know it, you feel like you’re in a never-ending cycle of “doing” instead of “achieving.
In this guide, we’ll take a look at the ideas to refocus and reassess what’s making you and your small business truly productive and what could be trapping you in the quicksand.
Why longer hours aren’t the answer
Working longer hours doesn’t always translate to productivity increases. A study from Stanford University by economics professor, John Pencavel, found that productivity per hour declines sharply after a 50-hour work week. After 55 hours, productivity drops so much that putting in any more hours would be pointless. Additionally, when people work up to 70 hours a week, they are only getting the same amount of work done as those putting in 55 hours.
Ford Motor Company also proved the “burn-out” effect of long work hours through a series of studies in the 1990s. These studies showed that for every additional 20 hours of work above the recommended 40 hours per week, an increase in productivity was only seen for three to four weeks before that productivity reversed and dipped below normal levels.
Consistently working long hours can make you and your employees less effective in the long run. Productivity declines, and more hours are spent catching up on neglected tasks. “Work-life balance” is a buzzword being used a lot in recent years. What it really means, though, is understanding the threshold of productivity before it turns to burn-out.
A different mindset in the new normal
In 2020, the way we work changed. Due to lockdowns and social distancing restrictions, many businesses were forced to adapt to remote work conditions. As a result, companies have now re-evaluated how the new normal of workplace productivity should look.
Employees are also re-thinking their motivations and what they value in a workplace. The U.S. has already witnessed what was termed the “Great Resignation”. A record 4.3 million workers left American jobs in August 2021, and this trend of leaving jobs is expected to follow in Australia in late 2021 and early 2022. Microsoft also cites that over 40 per cent of the global workforce will consider leaving their employer this year. And while hiring is back above pre-pandemic levels, how modern workplaces should be structured to attract and retain top talent is still undergoing a major transformation.
As businesses step into the post-COVID normality of workplace flexibility and demonstrate their value to employees (instead of the other way around), they will need to balance between what worked previously and what will amplify future success.
To increase long-term productivity and do more with less, employers must evolve workplace cultures and values to meet new expectations around the employee experience. The imperative is to support that experience in a way that also improves productivity. Factors such as distributed work environments, better training to create higher outputs, and automation are now essential ingredients to productive workplaces that help employees do more with less.
How to support a distributed workforce
Remote work, virtual meetings, the hybrid workplace, and working from home aren’t new ideas. These trends did, however, become commonplace during the global pandemic. In many countries, people have returned to physical workplaces. This return is looking quite different to pre-pandemic days, though. Talented employees are actively looking for roles that offer remote and hybrid (remote and in-office) conditions. If you’re still not set up to support a distributed workforce, now is the time to get with the times.
To help your remote workers perform at their most productive, you need to have a plan for inclusion, collaboration, flexibility, and accountability.
Inclusion
According to a recent McKinsey study, Employees who feel included in more detailed communication are nearly five times more likely to report increased productivity. In addition, business leaders who communicate employee updates more frequently – sharing what’s already decided and communicating what is still uncertain – can boost employee motivation and productivity.
Collaboration
Remote work can increase collaboration when using the right tools for the job. Applications like Slack, Trello and Basecamp make company-wide activity accessible to everyone.
Employees can also search through records if they missed something or want to make sure they understood communications. File sharing is faster and easier, as is initiating ad-hoc group conversations.
When it comes to collaborating about (and with) customers, cloud-based CRM and ERP systems such as NetSuite create a single view of all interactions. Regardless of where employees are located, everyone has 360-degree tracking and reporting on customer activity and experiences. Real-time collaboration and updating of information mean customers also receive consistent experiences – from every employee.
Flexibility
Not everyone works the same way – and let’s face it, the days of the nine-to-five job are over. Most of us are continually connected and reachable by messaging app, email, or phone. Traditional working hours no longer apply in the digital world. We’re all more flexible when it comes to being accessible.
Particularly for parents, carers, or simply personalities more suited to a distraction-free environment, work location is also becoming increasingly important. A study by Stanford found that working from home increased productivity by 13%. The increase was due to more calls per minute attributed to quieter and more convenient working environments and working more minutes per shift because of fewer breaks and sick days. In this same study, workers reported improved work satisfaction, and attrition rates were cut by 50%. With employees embracing this new way of working – and being more productive – it makes sense for business leaders to embrace it.
Accountability
To maintain accountability, you need to communicate effectively. When it’s clear what you expect from people, it holds them accountable. In turn, that accountability generates incentive to make sure tasks are completed on time and to expectations.
Regular team meetings provide a predictable cadence that helps employees stay on track and know when updates are needed. Especially with distributed workforces, quick daily check-ins can strengthen accountability, offer the chance to check understanding, and raise any issues straight away. Other benefits of this approach include improved communication, collaboration, and the opportunity to increase collective knowledge.
Better training to create higher outputs
Lean Six Sigma is a process improvement methodology that uses team collaboration to reduce variation and increase performance and outputs. One aspect of this method that every business leader can apply is the consistency of business process training.
With consistent processes and effective onboarding, you can remove potential “wastage” from business processes. This wastage can include:
To build consistency and increase your outputs, proper training is crucial for everyone in your business. The right business management systems can significantly improve your business process training. NetSuite is one solution that manages all core company functions from one application. Employees all gain role-based access to the same system and see one central source of data. With everyone using the same platform, collective system and process knowledge is streamlined, people can learn faster, and you can consistently drive higher outputs.
Put the Pareto principle into practice
The Pareto principle, more commonly known as the 80/20 rule, dates back to 1906. Italian economist, Vilfredo Pareto, observed that 80% of the wealth and land in Italy was owned by only 20% of its population.
80/20 distribution was thereafter noticed in a variety of situations. Today, it has evolved into a definition of 80% of outcomes being driven by 20% of efforts. It’s also a constant reminder to focus on the 20% of the workload, clients, or sales that generate 80% of productivity and revenue.
To make effective use of the Pareto principle, analyse your business inputs and outputs. At a basic level, this will include:
Also, analyse where the principle is happening in reverse. For example, where 80% of time is being spent on tasks that only produce 20% of the total output. Many small businesses build up inefficient processes over time. These are the 80/20 processes you want to identify and rectify.
When you apply the Pareto principle to your business, you can refocus your team on what matters and get more done with less effort. Motivation and productivity will also increase as you see higher outcomes from the same amount of resources.
Play to your strengths, outsource the rest
In a small business, you’re constantly learning. There’s so much to do that you and your team are used to wearing many hats. It’s a brilliant environment for rapid learning and personal growth. Part of that learning and growth process, however, is uncovering your strengths and weaknesses.
It’s impossible to be good at every business discipline. And, the results are minimal when you spend time and effort working on tasks that aren’t in your skillset. Remember that 80/20 rule? Don’t get caught in the trap of spending 80% of your time producing 20% of the results you need.
We’re living in a time when hiring specific talent for your business needs is no longer a lengthy process. Freelance resources are everywhere, and using them brings a range of benefits, including:
Reduced business risk
The hire of full-time resources makes sense when you have a constant flow of work. But say you have a branding and design project that only takes a short time to complete. A full-time design resource needs to be engaged full-time. By outsourcing the work rather than filling a permanent role, you’re paying only for the time that’s needed. You’re reducing the financial risk of under-utilised full-time resources and the risk of having that full-timer lose motivation when they’re not being kept constantly productive.
Instant expertise
Small businesses often hire resources that have multiple skill sets. But every “jack of all trades” needs to brush up on their expertise for specific tasks when the situation calls. When you outsource, you can find resources with the exact skills required to work through a project quickly. You can find highly qualified temporary resources who work on those same types of tasks day in, day out. They can hit the ground running and apply instant expertise where it’s needed.
Scalability
Demand can change quickly, as we saw throughout COVID-19. When you need to meet rapidly increased demand, the hiring process can be the bottleneck that slows things down.
Once you’ve hired a permanent resource, you also need to keep the same or increased activity level to ensure your resource is constantly engaged. In contrast, you can scale up or down with demand when outsourcing specific activities and tasks.
Sites such as fiverr.com, upwork.com and freelancer.com have resources available in just about every discipline you can imagine, such as project management, virtual assistants, marketing, design, product research, sales, the list goes on. Review the 20% of tasks your in-house team generates 80% of outcomes from, and consider whether you can outsource the rest.
Identify and track valuable metrics
You can’t improve what you can’t measure. When you identify the metrics most important to your business, you naturally pay more attention to enhancing tracked outputs over time.
Critical metrics that small businesses should consider tracking and reporting on include:
Qualified leads per lead source
How many leads you’ve acquired, and from where they came. These metrics give you a good understanding of which lead generation tactics are working. This also helps you figure out which channels warrant the most focus and energy.
Lead to prospect and customer conversion rates
The percentage of qualified leads that have become prospects and opportunities, and the percentage of prospects that became paying customers. These metrics give you a strong indication of how effective sales efforts have been in moving potential customers through the pipeline.
Cost of customer acquisition
Calculated by dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent. The Cost of Customer Acquisition (COCA) lets you understand whether your marketing spend is sustainable compared to your average sales revenue per customer.
Sales revenue
Calculated by adding up all the income from customer purchases, minus the costs associated with returned or undeliverable products.
Customer churn and retention rates
The percentage of repeat customers you lose within a specified period (churn rate) business with your company and the percentage of repeat customers you retain within a specified period (retention rate). Your churn rate helps measure the number of customers lost over time, whereas retention rate measures your ability to keep customers purchasing from you over time.
Cost of Good Sold (COGS)
The total of direct costs and expenses involved in producing and delivering goods and services. Your COGS does not include indirect costs like employee wages or sales and marketing expenses.
Gross profit margin
Your gross profit margin is calculated by subtracting COGS from your sales revenue. As a formula to show your GP percentage, use Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue x 100. This percentage indicates how successful your business is at generating revenue while keeping the costs down.
Operating cash flow
The amount of cash generated by your company’s normal business operations. Cash flow is the lifeblood of every small business. Operating cash flow indicates whether your company is making enough positive cash flow to maintain and grow operations. This metric gives you a sense of how much cash can be spent in the immediate future and whether to reduce spending.
Budget vs. Actual
The comparison of your company’s planned financial transactions for a given period (the budget) to the final financial results of that period of time (the actual). These metrics allow you to compare the overall difference between budget and actual, and delve into how specific business areas have varied from budgeted amounts.
Cloud-based ERP systems, like NetSuite, provide role-based dashboards where all these metrics can be tracked in real-time. These dashboards include live report snapshots, KPIs (Key Performance Indicators) to track how metrics are performing compared to expected results, and reminders to prompt action when and where it’s needed.
NetSuite also automates key reports to be sent directly to your inbox at set intervals. This functionality helps business leaders keep a regular cadence to reviewing business outcomes – without manually pulling data each time.
Live dashboards and automated reporting on crucial business metrics and KPIs can help you do more with less and spend that otherwise manual reporting time on more strategic initiatives.
The many ways to automate
Many growing businesses struggle with how to scale. When operations ramp up quickly, the issue can compound. The amount of time your company spends on low-value, manual tasks hampers its ability to work on the strategic, revenue-generating initiatives that keep it scaling further. Automation, however, supports rapid scaling by taking care of repetitive, time-consuming tasks.
Automation isn’t just for enterprise organisations anymore. Numerous software applications bring accessible ways to automate tasks. For example, email auto-replies aren’t just for out-of-office notifications. They can also be used as automated acknowledgements of customer queries. For example, an immediate response that sets customers’ expectations of when they will hear from you can eliminate additional calls and emails to customer service.
Social media scheduling tools like Sendible or CoSchedule will help you stack up, schedule and automate publishing across different social channels. With these tools, you don’t need a resource to manually create each post at the time it needs to go out. It’s a good idea to test and identify the ideal post times for your audience first. Then, set your social posts to go out automatically at the most optimal times.
With programs like Tidio and LiveChat, you can automate responses to common questions your website visitors may have. You can provide links to website content, set up chat sequences to gather information, and more. This takes the hard work out of manning live chat programs or answering calls for these queries.
Small business ERP systems, like NetSuite, are leaders in automation. These systems bring all core business data together into a single platform. This consolidation of data enables you to build automation across the business to reduce manual data errors, save significant time, and boost your outputs without additional resources.
With an ERP system, you can automate repetitive tasks throughout supply chain, inventory management, finance, sales and marketing, project management, and more. You can set minimum and maximum reorder points, for example, to ensure stock stays at optimal levels. Support functions such as case management, issue tracking, warranty registration and repair can also be automated. The list goes on with countless other ways to do more with less and strengthen process consistency. Read more about how a NetSuite ERP system can automate tasks across your business.
Equip your business for success
By increasing your productivity and figuring out how to do more with less, you can maximise your profitability. In turn, that profitability will keep your small business growing continuously. As we’ve seen, longer hours certainly aren’t the answer to becoming a more profitable business – and in fact, can take a serious toll on productivity.
Now is the time to re-evaluate your business mindset and evolve your workplace culture and values to meet new expectations around the employee experience. A distributed workforce that focuses on inclusion, collaboration, flexibility, and accountability can make employees more productive and stay with the business for longer. Better employee training can also drive improved outputs.
Analyse where you’re spending 80% of time to create only 20% of your outputs and refocus on activities that enable you to create higher outcomes from less effort. The outsourcing model can save you considerable time on tasks that aren’t within your core skill sets and allow you to scale while reducing business risk.
Keep a close eye on critical business metrics that show where you can improve over time, and look for opportunities to automate low-value, repetitive tasks.
Small business leaders and their teams don’t need to feel caught in the productivity quicksand anymore. With the right processes and systems in place, you can increase productivity and do more with less – without burning the midnight oil.
Talk to an ERP expert now about how ERP technology can help you streamline and automate your business to boost productivity and do more with less.
Everyone should be equipped to amplify success
DWR delivers the tools to amplify success; by bringing the right technology, process framework, and team of business experts together.
We're an award-winning NetSuite ERP partner based in Sydney and Melbourne.
Talk to a business technology expert about your challenges, needs, and business growth goals.