Small Business Owners: Eliminating Organizational Waste to Increase Profits

You’ve heard it said often… Management can be broken down like this; eliminate, automate, delegate. You must always eliminate anything (and everything) that is not working, is wasteful, too costly, has no return on investment (ROI), and is not making the right kind of progress for your business.

Automate everything you can. This includes client reminders, billing, marketing, promotions, follow-ups, etc.

Delegation is REALLY important, and most often not done. It’s not done enough because we (you, me and most everyone) has a hard time “letting go.” Basically, we’re control freaks. You must determine your value per hour and NEVER do work that is below that pay level. Begin by delegating (outsourcing) all the things you loath.

It will instantly free your time for doing “HUBU” – your Highest Use and Best Use of your time to attract the next big client.

No one talks about how to eliminate unproductive routines, corporate bureaucracy and ‘administration trivia’ that kills ambition and sap energy for far too many employees. Organizational Drag is demoralizing for employees and a waste for companies, which badly need the full energy and commitment of all their workers to keep or make the business profitable.

No one talks about how to evaluate the true causes of organizational drag — all the practices, procedures and structures that waste time and limit output — not just the symptoms. The symptoms may seem minor annoyances and inconveniences that could be wiped out without much effort – too many process steps to get orders out, nonproductive meetings, meaningless goals, and time wasted on work that no one will even care about.

But those symptoms stem from fundamental problems. Companies wind up in trouble and squander the time, talent and energy of their workforce when they lose focus, spend money on things that don’t make a difference to employees or the future of the business, and use operating models that are out of whack.

Below are some areas that waste can be eliminated from an organization or restructured to help it to become more profitable.

• Board of Directors — being complacent and procrastinating on leadership, governance and compliance issues. Also, delaying or distorting strategic decisions that overlook waste and high costs, hastily conceived and harmful cost reductions, missed new product and business development opportunities and poor long-term investments that destroys shareholder value(profits).

• President – wasted authority, responsibility, ability, talent, technology and knowledge by spending to little time on ‘strategic issues/vision’ and ‘operational improvements strategy’ by accepting positions work on multiple boards that are not relevant to the company but provide networking and resume building opportunities for them. Not executing plans that improve shareholder value(profits).

• Administration (wasted efforts) — outdated technology, lack of current policies and procedures, poor tracking of costs, expenses, lost files, inadequate reports, inefficient ordering methods, no competitive bidding, facilities inefficient for operations and employees mindset of ‘we know what we are doing’. Senior executives having too many meetings that have little or no direct impact on company value (profits).

• Human Resources – Poor Employee Handbook, Ambiguous Employee Responsibilities/ Inadequate Job Descriptions, Irregular Employee Evaluations, Outdated Employee Benefits, Poor job training, high employee turnover and improper employee tracking, record keeping systems and the ‘don’t rock the boat’ mentality.

• Finance/Accounting (wasted profits) — credit losses, poor refund/returns tracking system, poor budgeting (profit planning system), Excessive Expenses, Slow Collections from current/former customers, delayed invoicing, inefficient record keeping (inventory/order management) and idle money

• Sales (wasted business opportunity) — neglected customers, uncalled prospects, lack of sales, calls on unqualified prospects, unsatisfied customers, high pressure sales tactics, rash promises and out-moded compensation structures

• Marketing Communications (wasted actions) — executing old marketing plan (targeting wrong customer audience), ineffective advertising, no publicity, lacks ROI measurement, poor coordination with other internal departments, outdated marketing material, outdated marketing message, no coordinated social media marketing presence, uninformed about company plans, internal employee communications lacks credibility and the ‘they can’t handle the truth’ mentality by senior management

• Operations (wasted products/services) – unused capacity, wasted labor, poor training, absenteeism, slow work pace, idle employees, spoiled work, out-dated methods and equipment.

• Ownership (wasted investment) – no profit on investment and the it’s a ‘write off’ mentality.

No one shows you how to attack the root causes of organizational drag listed above, which allows companies to eliminate unnecessary work, reenergize the workforce and at the same time, put the business on a better course. Making the necessary improvements allows you to ‘raise the bar’ in the organization by following the three R’s.

• Refocus on strategic priorities

• Resets the budgets

• Redesign the operating model

Refocus on strategic priorities

Refocus the organization on the most important business units, customer segments and geographies in which the company has a repeatable formula for growth and a ‘right to win’.

A. Within business units, eliminate any sources of profitless volume and products in no growth markets.

1. Look closely, company may have stretched their brands and used product portfolios to customers and market in which they are undifferentiated and profits are weak. This contributes to drag as well as costs that rob resources from better and potentially, more profitable ideas.

Reset the Budgets

How companies allocate money can contribute to organizational drag by keeping nonessential work going on. But it is not easy to make the tough decisions to defund.

I recommend profit planning based on zero-based budgeting and planning to make the choices clearer.

This information can be configured and stored in quickbooks.

A zero-based budgeting and planning process using stretch targets challenges conventional thinking and brings forth bolder ideas.

Redesign the Operating Model

After streamlined portfolio and reset budgets, it is important to redesign the operating model —- that is, the way the company is organized to deliver on its strategy. Thinking ‘customer-back’ or ‘frontline-back’ provides lens to eliminate work. Just ask: How does this activity help to serve the customer better? Or How does this activity or information serve the internal stakeholders better? —- Companies need to look at inefficiencies cross-functional, cross-geographical or cross-business unit activities, where no executive or team has any account activity.

Assess your current state business operating model. Then identify the waste in your operations top to bottom. By identifying by the seven wastes of lean which provide a lens and a language to identify waste in your own work. Ask yourself these questions:

Transportation: How many handoffs do I have in my work?

Inventory: How big is my queue of work tasks?

Motion: How much time do I spend searching for information?

Waiting: Does my work sit idle waiting for other tasks or information?

Overproduction: Do I perform some tasks long before they are needed, while other tasks are late?

Overprocessing: Do I do more than is necessary, such as three-paragraph emails where one sentence will suffice?

Defects: Do I have tasks I must rework?

Keep a list of what you are looking for, and make notes when you observe those specific instances. Identify the cause of that waste. You aren’t going to eliminate everything, and certainly not all at once. But if you have multiple observations, you can make choices about the best opportunity to improve that increases profitability.

The idea of categorizing seven wastes is credited to Engineer Taiichi Ohno, the father of the Toyota Production System (TPS). Although the classifications were intended to improve manufacturing, they can be adapted for most types of workplaces.

The following are the seven wastes, as categorized by Taiichi Ohno:

• Overproduction — Manufacture of products in advance or in excess of demand wastes money, time and space.

• Waiting — Processes are ineffective and time is wasted when one process waits to begin while another finishes. Instead, the flow of operations should be smooth and continuous. According to some estimates, as much as 99 percent of a product’s time in manufacture is actually spent waiting.

• Transportation — Moving a product between manufacturing processes adds no value, is expensive and can cause damage or product deterioration.

• Inappropriate processing — Overly elaborate and expensive equipment is wasteful if simpler machinery would work as well.

• Excessive inventory – This wastes resources through costs of storage and maintenance.

• Unnecessary motion — Resources are wasted when workers have to bend, reach or walk distances to do their jobs. Workplace ergonomics assessment should be conducted to design a more efficient environment.

• Defects — Quarantining defective inventory takes time and costs money.

Since the categories of waste were established, others have been proposed for addition, including:

• Underutilization of employee skills — Although employees are typically hired for a specific skill set, they always bring other skills and insights to the workplace that should be acknowledged and utilized.

• Unsafe workplaces and environments — Employee accidents and health issues as a result of unsafe working conditions waste resources.

• Lack of information or sharing of information — Research and communication are essential to keep operations working to capacity.

• Equipment breakdown — Poorly maintained equipment can result in damage and cost resources of both time and money.

After you have identified and categorized wasteful business practices/process areas in business units that need and can be resolved. Develop specific solutions for specific waste instances. Don’t try to eliminate waste in broad themes.

By identifying, improving and eliminating wasteful areas throughout the organization that decrease profitability. A business owner can increase their ‘profits’ on the bottom line in a good or bad economy.

A Wise List Of What To Look Out For When Starting An Online Home Based Business

And there was light.

Here is a wise list of what can help you gain the most with your business opportunity search…

1. The very first thing to look for is to look out for hype. Many online businesses now a days and even back 15 years ago (that I can remember) try to out shine one another by saying this is the one and only business that you will ever need. They promise you the moon and stars for nearly no work at all (but they will certainly take your money), my advise, read reviews about the business if they have any. Do your homework. If they appear to be sound, after your homework is done, proceed. Join them.

a) If you know in your gut (discern) that it’s nothing but hot air, don’t waste another minute of your precious time reading their hype. Some may say, “well it’s only $50 bucks or $100 bucks or even $200 bucks,” and yeah, sadly that’s what millions of others said before you and I (from my distant past) and we never saw it coming, the moment when we said, “I don’t want to do this, I just want to earn money online but not this way.”

Be mindful of your time. Your time is precious on planet earth. Give yourself a break and invest your time in worthy causes, life changing businesses that are solving problems and not just making money at other people’s expense. It will catch up on those who do that sooner or later. I’ve seen it first hand from the side lines. By doing a little homework and careful planning and doing the right things, you’ll feel good about working with a online business you can share with your kids or grand kids.

- Me, I’m all about morals. I love people, not money. Money is a useful tool and yes I like everyone else will use money daily, weekly and so on but money is not my god. When you win people’s heart, the money will come if you are persistent, have a goal and never quit and treat people better than you would like to be treated, it will get better in time, trust me on that.-

2. If you are low on finances, you can earn money online by entering paid surveys. This is a great way to invest your time online outside of your day job. I know I have made money through surveys and when you get that money in your PayPal account, it’s like WOW, now I have extra money and I can do what I was planning.

3. Also if you are low on investing into a business opportunity consider participating in focus groups. Focus groups are generally places in big cities (and some online) where you discuss a topic, a product or something of value where they need your unique view point about a matter and by doing so you will be paid for your time.
I have participated with quite a few focus groups in the past and I have been compensated for tasting candy bars, watching TV commercials and giving valuable feedback long before the product/or ad went public. You can earn extra money to fund your business opportunity and it’s great to know that with focus groups it’s your opinion that gets you paid.

There is no right or wrong when it’s your opinion that counts and anyone can do that.

4. I have learned the hard way years ago to never and I mean never put all your eggs into one basket. Doing so will either (sadly) wake you up or could crush all your hopes and dreams. It’s always good to keep your options open when it come to business. Meaning if this one business opportunity doesn’t work for you and you gave it your all (and there can be multiple reasons why it didn’t work out for you), it’s always good to have a few logs in the fire to fall back on for just in case. Again it’s good to stick with one main business opportunity and give it your all but its good to have a few or at least 2 others in reserve.

a.) Think about this, you are here now because you survived 1 out of 40 million sperm. You swam through an extremely long way through life to give up now! You can’t quit! You have a purpose! How can I say that? You are here, the other 40 million sperm are not! Tell yourself, “I was born to win, winning is much more than my personal goal, winning is my destiny because I am here and I am a winner, that’s what I am!” Believe that! Never give up on your dreams. You were made in the image and likeness of God. Respect that and cherish that truth. Tell yourself everyday that no matter what, I was born to win!

5. When you do actually find a good online business that you can see yourself doing at least 5-10 years from now or longer (this is a good sign) spend quality time to find out all your can about it before pulling the trigger. Meaning read it, re-read it and bookmark it and come back to it the next day or few days later. Also if you are a believer of the faith, spend some time praying about it. Seriously. If the same energy is there after a few days or so, go for it. If not, don’t give up, as Sade song reminds me, “don’t walk around with a frown, oh no, keep looking.”

6. You can sell other people’s products or service and make a commission when a sale is made. That’s called being an affiliate marketer. You create or follow a niche and post/promote about that niche and drive traffic to your post on a blog or website, through social media and that’s just for starters. Bloggers can make a really good extra income if you love to write. Find your niche or niches and start typing. Writing can either fund your dreams or it just may be your dream. Don’t give up.

7. Never put yourself down and never hang around others who do put you down. In any business you need positive vibes, good energy to make it in this in this world (or the cyber universe for that matter) because there’s a lot of ups and downs for any and every entrepreneur. Learning from the greats, you have got to stay on point and stay clear from toxic thoughts which come from toxic people. Be the difference you are searching for.

8. Don’t sign up for too many seminars from gurus and such. If you did, you can feel like you’re being pulled in every direction when you are listening to 10 different points of views. Focus on 1 person or no more than 3 people who you believe can and will help you reach your goal. Everyone’s goal is different. You may desire to make anywhere from $40,000 to $100,000 a year from the comfort of your home while someone else has a huge goal to making $40,000 to $100,000 a month. And then another may have a bigger goal to making $40,000 to $100,000 a week. The point is don’t over do it with the goals. Be honest with yourself, have a goal and stick to it. A goal that you believe you can accomplish and don’t have a goal to try to out do someone else but instead, you challenge yourself to see if you can do better each and every year.

a.) It’s better to be prepared for an opportunity and not have one than to be not prepared when an opportunity presents itself. Have some money set aside just to fund your vision, or to invest in an opportunity.
Plan on reaching your goal. See yourself reaching your goal in your mind. Make a habit of writing things down that make an impact in your life. Expect to reach your goals by focusing with all your heart and mind and seeing yourself at the finish line receiving your rewards. Do what the 95% of the world simply won’t do. Be the 5% that you and I need to see everyday. Go the extra mile because the road is not crowded up there.

9. Join a business that is solving a problem and not creating one. I will share one such business I believe that can and will change your life that you can feel good about later on. Join with like minded people who share your core beliefs, your vision and are supportive and helpful. No one likes contacting a business that will gladly take your money but will respond to your queries weeks later after you sent a few request. Do your homework. Make sure you’re working with the best or at least one of the best in your niche business type. Good businesses (if they are fairly new) will do whatever they can to help you if they see your sincerely care about their business. Larger ones may or may not but depending on the vision of the company. Check up on the stories they write, what others are saying about them. See if they are really solving a problem or creating one. Again I will give my best pick of 2017 of which business you should join, soon.

10. Make yourself a to do list and create a must do schedule. We must have a goal. I must say this again that goals are vitally important for our success. Those who never plan, plan to fail. Always set a goal and look at it everyday. Earl Nightingale is famous for many quotes and one of them is, “you become what you think about.” It’s true, whatever is on your mind daily, you’re moving towards it, daily. If nothing is on a person’s mind, well then sadly that person is moving but going no where. It’s very important to have goals in life. Write them down. Look at them daily, 3-4 times a day. My advice, write it down and place it in your wallet (pocketbook), pull it out from time to time to look at it. Write it on paper and stick in on your wall, post it on your mirror in the bathroom. If you see it a lot, it will be on your mind a lot.

My personal advise, don’t quit your day job until you find something that you enjoy doing and that you can see that what you’re bringing in online is very close or more than you are making at your day job. Unless you have a nice stash of cash that you can live on for a year or more again don’t quit your day job. If you can, try to work less hours on your day job so you can put more hours into your dreams. I remember I worked in a medical office and I work 3 days a week there and 3 days a week at home on my online businesses and yes I didn’t go to he movies much, like once a year. I didn’t buy new clothes for several seasons but I was making progress little by little because I had a goal. Work on your goals daily, little by little. Devour the elephant day by day, month by month and stay with it. Don’t try to eat an elephant in a day when it takes months to consume.