These days, business owners are making some interesting decisions, and they show up in the bottom line. It’s not so much cutting costs or putting in more overtime (although that’s partly true), but many companies are operating in a way that challenges the preconceived notion of productivity, and it pays off—and some of those payoffs were not so obvious before.
It’s the not the companies with the largest budgets and the most employees that are coming out ahead. It’s those with enough insight to know what operational decisions actually make a difference for profitability.
Delegation of Certain Tasks to the Right People
One of the most draining contributions to profit is business owners and other stakeholders performing work that could be handled by someone else. Now, this isn’t implying some sort of avoidance or laziness—instead, work that can be delegated is low-cost or no-cost, and work for which business owners are paid much higher to do is kept in-house.
For example, a dentist who spends an hour doing insurance verification earns hardly any money that hour as opposed to treating patients. Alternatively, a business owner who schedules their own appointments to avoid paying anyone else to do it essentially pays themselves an hourly wage at minimum wage to not focus on growing the company through other means.
This has sparked demand for virtual assistants for dental offices and similar options across industries. The bottom line is whatever can be outsourced for a fraction of the cost compared to lost opportunity for obtaining revenue is the way to go.
Eliminating Decision-Making Bottlenecks
Another one of the least profitable options is losing time—and money—through delayed decision-making. Either a process requires too many approvals, or people refuse to share information that could expedite entry without haphazardness—and lost time occurs.
Thus, companies willing to grow with simplified decision-making processes give more power to those closest to the work—and instead of needing three signatures for approval of a $500 expense, companies are providing parameters and educational insight to make smaller decisions all part of the approval process without extra time wasted.
Others are procuring more and better information systems so they have the answers at their fingertips instead of waiting on another person to run a report. When information is needed, a decision can be rendered right away instead of waiting days until someone else gets around to it.
Automating Work (or Not)
Automation is a matter of saving organizations thousands or expending thousands trying to fix what isn’t broken or just doesn’t exist. The difference is knowing what works best when.
Companies that are seeing value in profitability through automation have determined what basic, repetitive tasks suit machine involvement. Data entry, invoice generation, inventory management—all of these take mere seconds and within minutes, efficiencies can reduce human error and save organizations time.
Alternatively, many companies are choosing not to automate much at all. Customer service calls, creative endeavors, relationship-building elements all go farther with human involvement than not. It pays to have hybrid opportunities where machines take care of basics but people manage when it gets complicated.
Reassessing Space and Other Resources
Commercial real estate is expensive; businesses who reassess how much space they actually need aren’t just considering remote work but what’s necessary to make the public-facing component operational and what’s needed for back-end support—or if there needs to be any back-end support at all on-campus.
There are businesses successfully operating on much smaller footprints now. Their employees aren’t as required to come on-site every day anymore—those who truly need a team-based project are welcome but smaller spaces suffice.
Others are finding success in shared resources instead of owning everything. If a company needs expensive machinery three times a month at best, it’s cheaper to rent than own. Capital can be freed up for assets and resources that generate revenue rather than fluff that causes overhead.
Decreasing Customer Acquisition Costs
Customer acquisition is expensive; maintaining existing customers costs less. Therefore, those companies that are coming out ahead these days understand how best to decrease customer acquisition costs while increasing customer lifetime value.
For example, companies that know how to navigate one marketing option versus another—rather than arbitrarily spending across the board on low-impact efforts—are better off retaining customers so their acquisition costs are more than paid for in the long run as keeping existing customers costs less.
In addition, creating advocacy champions out of existing customers costs nearly nothing with high conversion rates than cold leads; therefore, companies are working harder than ever to make existing customers satisfied enough with services rendered that they’ll refer others.
Making Measurable Resource Investments
One of the biggest strains on profitability is investing in areas that don’t return value; unfortunately, many organizations lack the systems for determining whether something is working out or wasting time and money until it’s too late.
Businesses getting ahead are gaining much better insight about what’s working out where they invest time from their employees to their services rendered as well as subsequent marketing efforts and operational applications. Measuring what’s working makes sense as long as businesses don’t expect minute-by-minute detail about everything.
For example, which products sell better than others? What services render more satisfaction? Are recommendations received because of better promotion or ideal functional alignment? When businesses can hone in on what’s providing value versus wasting time and money, they can quickly turn around efforts appropriately.
Creating Scalable Systems
One of the most profitable operational decisions entrepreneurs can render is systems that expand without proportional overhead costs month after month; instead, systems ought to create orders—even if ten clients requested services versus 1,000 clients requesting services.
Systems created from a start conducive to growth reduce the costly scrambling when growth outpaces operational expectations from the get-go. Think about volume production and what will happen when each person requesting needs more complex answers and additional responses.
There’s a balance, however; one must integrate limited flexibility with standardized detail so every part operates effectively without getting lost in translation. Scalable systems make sense; those who know how best they will grow from the outset make it work before anyone else has an opportunity to catch on.
These aren’t particularly innovative operational decisions but provide significant competitive advantages across potential businesses adopting them if they’re interconnected and cognizant since they make one-time sense but create long-term viability for profitability for decades to come when economic stresses persist over time.
