First, the bad news: making operations, finances, and employees work to maximum value can mean having to eliminate some employees or operations at times. The good news, though, is that many businesses have been able to hold on to existing resources–even during a turnaround situation–by reassigning them to better purposes and uses where required. This is the heart of asset redeployment–the practice of reassigning people, things, and efforts to achieve optimal efficiency. By using capital wisely, your team can make it stretch a lot further. For example, coordinating employee and independent contractor work to produce the greatest amount of work with the fewest number of people working the least number of hours means greater return on efforts and dollars.
Eliminating unprofitable operations–in whole or in part– is a wide-ranging task. Anything that may be termed “waste” in the company needs to be discarded or put to better use. One area that should be addressed is waste due to unnecessary multiple consumption of potentially shared resources. In plain terms, the individual use of items that could be shared is an extravagance that few small businesses can afford. Think of shared printers rather than a printer on each desk as an example. it is highly unlikely that every single person in the office will be printing at the same time. What’s more, high volume printer/copier combination machines use less expensive toner than ink cartridges in smaller units. This initiative may require more cooperation and patience than providing unique units for each employee, but such a move can reduce the amount of money the company must spend to get work done.
Avoiding Duplicate Efforts
A counter problem to the above is too many employees doing the exact same job, either knowingly or unknowingly. Such multiple effort, a clear waste of time, resources, and money, often occurs when someone is fearful of delegation or feels threatened by another’s talents and abilities. Therefore, management should make sure that several people are not doing the same job in differing formats and degrees.
Non-linked software is a perfect example of this kind of waste; if the secretary maintains supplier addresses and phone numbers, and the accounting group keeps the same information in their files, someone is performing an unnecessary job. Instruct employees in ways to avoid duplication of effort. Look across your organization, document processes by task, and find ways to reduce overlap. This is not to say that your staff should not be cross-trained. It is, in fact, good succession planning and talent management to have people who could do someone else’s job in a pinch!
Managing Capital Resources
Capital resources include facilities, supplies, and work in process. Buying only what is needed when needed (“just in time”) is one way to wisely manage resources. Another way would be to try to have more finished goods inventory than unfinished, because finished goods can be sold quickly to raise cash. At times, you may consider renting or leasing an asset rather than purchasing it–especially if the term of the contract is less than the useful life. You may elect to “turn in” resources that you don’t need very often or convert them to less cash intensive resources through alternate financing.
Coordinating Human Resources
This is an area often overlooked because it is seen as “just administrative.” When employees, however, have jobs that overlap in requirements, it is up to the executive team in the small business to correct the situation for optimization. When your people are performing jobs that are not their strong suit, they usually take more time and make more mistakes than a better qualified and motivated counterpart.
Develop a competent management team to help you steward resources more efficiently. There are multiple areas for gains in efficiency and profitability if you will commit to the process. Note: process rather than one-time task–follow-through and experience the fruit of your labors!