Ideas for business improvement are often a “dime for a dozen” as there are usually several areas pulling and tugging at a business owner calling out for attention. Of course you cannot address them all at the same time , so learning to prioritize which issues need to be identified first is an all important skill that contributes to business success.
The question is “How ?” It is easy to embrace small business improvement ideas such as optimizing business processes, implementing quality management practices, and implementing lean principles.
However, there are at least two overlooked ideas for business improvement that can make significant impact in any business which many small business owners do not address as well as they should. What are they?
These are: Monitoring Key Performance Indicators, and using a SWOT analysis to help stay Agile and Adaptive.
This article breaks this down in simple language that will help you evaluate how to apply them in your business – or get help to do so!! It also provides some practical examples where BCINC has been involved in different industries.
Monitoring Key Performance Indicators (KPIs)
This should be a major component of your annual and quarterly business plan because it will help you generate data for strategic decision making, evaluating performance and accountability, and provide early warning signs to critical issues within the business.
Strategic Decision Making
Monitoring key performance indicators (KPIs) provides small businesses with valuable insights into their performance, enabling informed decision-making and strategic planning.
Examples
- A small e-commerce store can track KPIs such as website traffic, conversion rates, and average order value to identify trends and opportunities for growth, adjusting marketing strategies or product offerings accordingly.
- A small consulting firm can monitor KPIs such as billable hours, client satisfaction scores, and project profitability to assess the health of its business and make data-driven decisions on resource allocation and service offerings. Project profitability is a key KPI and can help you decide whether you should take on a job or not. Do not sign on the dotted line before doing this!!
- A small manufacturing or construction company can track KPIs such as production yield, equipment downtime, and defect rates to identify areas for improvement in its production process, implementing corrective actions to optimize efficiency and quality.
Performance Evaluation and Accountability
Monitoring KPIs gives small businesses the opportunity to evaluate employee performance, set targets, and hold individuals or teams accountable for achieving business objectives.
Define those areas you want to better understand upfront (objectives) and arrange to monitor and collect necessary data to help your analysis so that tangible decisions can be made.. Making decisions based off a hunch or assumptions is a recipe for disaster! Take a look at some real life examples below:
Examples
- A small marketing agency can monitor KPIs such as client retention rates, campaign ROI, and customer acquisition costs to evaluate the effectiveness of its marketing campaigns so that it can allocate resources to high-performing channels or campaigns to bring in even more revenue. This has practical application to ANY business.
- A small retail store can set sales targets and track KPIs such as sales per square foot, average transaction value, and customer satisfaction scores rather than the number of sales to evaluate the performance of its sales staff and provide incentives for achieving sales goals.
- A small dental practice tracks KPIs such as patient wait times, appointment scheduling efficiency, and patient satisfaction scores to assess the performance of its administrative staff. This information will be used to implement process improvements to enhance the patient experience.
Early Warning System
Monitoring KPIs serves as an early warning system for small business, as it helps identify potential issues or risks before they escalate into larger problems.
Examples
- A small software startup monitors KPIs such as user engagement metrics, churn rates, and customer support ticket volumes to detect signs of customer dissatisfaction or product issues early on, to help the business address concerns and retain customers.
- A small restaurant tracks KPIs such as food cost percentage, labor cost percentage, and table turnover rates to identify inefficiencies in its operations and implement cost-saving measures or operational improvements to improve profitability.
- A small construction company monitors KPIs such as project timeline adherence, budget variance, and safety incident rates to identify potential project delays, cost overruns, or safety hazards and take appropriate corrective action to mitigate risks and ensure project success.
Staying Agile and Adaptive
Flexibility in Response to Change
How can your business be flexible in response to environmental, social and economic changes around you? If you have never given this any thought prior to disaster striking, then it is likely that you will react in a way demonstrating you were caught off guard.
Making strategic decisions under stress and insecurity can push you into making decisions that may even be damaging to the business. You need data to make calculated decisions!
Staying agile and adaptive will allow a small business to quickly respond to changes in the market, customer preferences, or business environment, maintaining a competitive edge and seizing new opportunities.
Without a plan, you plan to fail! Here is where conducting a SWOT analysis, whenever you develop your quarterly goals, to evaluate your business Strengths (S), Weaknesses (W), Opportunities (O) and Threats (T) is helpful.
Examples
- A small software development company embraces agile methodologies such as Scrum or Kanban, enabling its development teams to adapt to changing project requirements or customer feedback quickly and deliver high-quality software products on time and within budget.
- A small retail store can remain agile by regularly reviewing its product mix and merchandising strategies, quickly adjusting inventory levels or promotional campaigns based on seasonal trends, competitor actions, or customer feedback to maximize sales and customer satisfaction.
- A small consulting firm embraces agility by diversifying its service offerings and target markets, allowing it to pivot to new industries or specialties in response to changes in client demand or market dynamics. Covid should be a lesson well learned. This will ensure continued growth and profitability.
Innovation & Experimentation
Staying agile and adaptive encourages small businesses to innovate and experiment with new ideas, products, or business models, fostering creativity and driving business growth.
Examples
- A small marketing agency can stay agile by testing different marketing channels, messaging strategies, and creative approaches for client campaigns, By analyzing performance metrics and client feedback the company can iterate and optimize campaign effectiveness continuously. This example can also be applied to ANY business including consulting and solopreneurs.
- A small food truck business can remain adaptive by regularly updating its menu offerings and experimenting with new recipes or flavors based on customer feedback, seasonal ingredients, or culinary trends to attract new customers and retain existing ones. Apply this to ANY small business by regularly reviewing your offerings and experimenting with new ones based on feedback from customers.
- A small technology startup can foster a culture of innovation by hosting idea generation sessions, encouraging employees to explore new technologies or business opportunities and experiment with prototype development to identify market opportunities or solve customer pain points.
Risk Management
Staying agile and adaptive allows small businesses to effectively manage risks and build resilience in the face of uncertainty, ensuring continuity of operations and long-term sustainability.
Examples
- A small manufacturing company can diversify its supply chain and production capabilities to mitigate risks from disruptions such as supplier shortages, transportation delays, or geopolitical instability, ensuring uninterrupted production and timely delivery of goods to customers. This can also apply to any business that relies on suppliers for production.
- ANY SMALL BUSINESS should establish remote work policies and invest in technology infrastructure to enable employees to work from anywhere, ensuring business continuity in the event of unforeseen disruptions such as natural disasters, pandemics, or other emergencies.
- ANY SMALL BUSINESS should maintain financial agility by maintaining cash reserves, establishing lines of credit, or securing alternative sources of funding to weather economic downturns, seasonal fluctuations, or unexpected expenses, ensuring the business’s financial stability and ability to adapt to changing market conditions. Without a backup plan, it is very easy to sink rather than swim in time of crisis!
Conclusion – Overlooked Ideas for Business Improvement
By implementing these two overlooked ideas for business improvement ideas, you can enhance your operational performance, drive efficiency, and position your business for sustainable growth and success in today’s competitive landscape.
What Should you Do?
Now that you have a better understanding of these two often overlooked business improvement ideas, what will be your next steps?
Will it continue to be “business as usual”, OR will you decide that it is time for change? Either way, contact us for further clarification. Let us help you breeze through this exercise with our expertise. CALL or CONTACT us today. We will be glad to assist you.
Related Articles
- Small Business Owner Stress – How to Manage It Effectively
- What is To Improve Quality? 6 Reasons For Your Business
- How to Create a Small Business Compliance Program – 6 Steps
References
7 Proven and Budget-Friendly Ideas to Improve Your Small Business (2024) https://www.freshbooks.com/hub/productivity/small-business-improvement-ideas
