Author: Jamohl Rutherford (Jamohl Rutherford, MBA, is leader of BDC’s small business team in GTA West (Mississauga, Halton Region and Etobicoke).
If you’re a business owner these days, the uncertainty never seems to end. Inflation, labour shortages, supply disruption, economic headwinds—the list goes on.
Entrepreneurs do have a choice in how to manage their business to respond to the challenges. One powerful—but often-overlooked—strategy is improving your productivity.
In my experience working with entrepreneurs, I’m often struck by how much a small, relatively simple change in operations can boost productivity and strengthen a business.
Entrepreneurs are usually amazed when they take a closer look at their operations and discover the difference between how processes work in theory and how they actually work day-to-day. This gap is where a lot of waste happens, by increasing costs without increasing value for customers.
Productivity-focused firms have higher valuations, profits and sales
Finding this waste isn’t hard. There’s even a basic process for doing so called a Gemba Walk—literally walking through your facility to observe employees and ask them about their tasks.
Improvements are often surprisingly simple, too. You don’t need to go out and buy expensive robotics (although that can be an interesting project too!). Common initiatives that can give you quick, easy wins include:
- investing in digital technology to automate order entry and other processes
- ensuring staff are proficient and cross-trained where possible
- reorganizing facility layout to reduce wasted movement of people and things
- cleaning up workspaces
- selecting key performance indicators to measure productivity and monitoring them with dashboards
Projects like these can have amazing benefits. They reduce costs, errors and accidents. They tend to make employees and customers happier. And as a recent BDC study found, they help businesses address inflation, labour and supply challenges.
What’s more, the study said, businesses that focused on productivity reported five times more profit per employee than their peers, six times more sales and four times higher earnings (before interest, taxes, depreciation and amortization).
The business landscape may be uncertain; but focusing on productivity should make it easier for your company to navigate the challenges—and even find ways to thrive!
To receive a detailed personal report and ideas to improve your business’s productivity, try BDC’s free online benchmarking tool at bdc.ca/performancebenchmarking.