How to manage and enhance small business productivity

Small businesses have an advantage over larger businesses – they’re small! They’re efficient, flexible and adaptive – responding quickly to changing customer tastes and needs. Another area where small business can outdo bigger businesses is in productivity.

How to measure – and then increase – productivity in your small business

Productivity is naturally easier to measure in manufacturing businesses. In a service business, productivity can be measured by the number of services provided in a certain period of time. However, failed services aren’t always easy to find and measure. Service companies rely instead on measures of customer satisfaction, and the number of complaints received. Improving productivity in labour-intensive service businesses is challenging because these businesses can’t rely on increased automation to improve efficiency the way manufacturing firms can. Nonetheless, small service firms are still finding ways to improve productivity. Some doctor’s offices, for example, combine booked and walk-in appointment times in their medical practices which makes the most efficient use of a doctor’s time, and provides more access to the doctor for their patients.

Many product and service businesses are making use of internet technology, web-based stores and e-commerce to streamline customer transactions – customers can see if a particular product is available in inventory before they get in the car. The speed at which business transactions are occurring is increasing, and customers have more access to information about the products and services they plan to purchase. This makes them better educated and more knowledgeable.

Uncovering avenues to productivity and efficiency

Improving small business productivity in the operations process involves an analysis of workflow, individual jobs, equipment, technology, physical layout, working conditions and customer feedback options. This usually means that you’ll need to answer the following questions:

• What customer experience are we after? Have we asked customers what their expectations are?
• What does the workflow to create our product or service look like? Is it being done in the most efficient way, with the least amount of waste?
• Is there duplication of effort in people’s jobs?
• Do we have the right equipment? Can we afford to buy better, more efficient equipment?
• Do we have the computing and telecommunication technology to get the job done well?
• Can we arrange our physical layout to improve productivity or communication among employees?
• Does our physical layout enhance employees’ productivity, or hamper it?
• Do our employees have what they need to do their jobs well – proper lighting, office furniture, supplies, relaxation areas?
• Do our customers have several convenient ways of communicating with us? Do we regularly communicate with our customers?

Each small business operations situation is unique and should be analyzed for ways to improve operations efficiency and productivity. An electrical contractor who works out of a service vehicle can insure that his workspace (the truck or van) is properly stocked with new and replacement parts, and appointments can be booked in a way that reduces travel time and ultimately customer costs.

Sometimes the most efficient way of doing something gets buried under years of doing something the same way. We know, “If it ain’t broke, don’t fix it.” We’re not suggesting that you do – but we are asking to you to improve productivity and efficiency over the lifetime of your business. You and your customers will benefit.