Tips to cut costs in business – KeysToSuccessClub.com

Host: Hi! Welcome to the keystosuccessclub.com on the short series where we explore the different elements that comprise success. Enjoy it.

Speaker: Hi, this is the ongoing video series on business success and today we are going to be talking about improving operations. So first of all, why is it important? Well, operations will directly effect your cost base and of course this will be big profitability. So that's number one, but also the effectiveness and efficiency of the operations can also significantly impact on the quality side of your business in terms of being able to deliver your service and product in an efficient way and that's being your brand and your marketing position in the marketing sector.

So operations is having a streamlined, efficient and effective operations is really critical to any organization. I have spent five or six year driving efficiency in the large corporates and I have got a few points to share with you from that experiences. Now I have also worked in small and medium companies as well, so I have pulled out a few common threads from those which I will share to you on this video. So the first that I have observed in all companies is the effectiveness of the measuring system to have in place so I should know how effective they are. So this is not just the actual raw data showing that that's the manufacturing company. It might be the efficiency is 80% of what's maximum, but also the causes of lost efficiency.

That's often where the data gets very sketchy in terms of what's actually going on and if you can't see what's going on, you have very limited chance to actually being able to make a difference, because the reality of what happened is you weren't be able to count what's important or not. You may have opinions or you might have views, but especially as you grow and the organization becomes larger, if your system of measuring is flawed, then you will end up spending a lot of time on the wrong things and you will not see a difference.

So make sure that you understand what's going on in your business and that you can really see the reasons for lost efficiency. In terms of areas, there are hundreds of ways of improving any operations of a business through the concepts of this short video I am going to talk about is automation and leverage. So in any business what you need to be looking at to get some efficiency is try some automation in that. This is because labor is often one of the most important components and if you are one man band then that's really important, because it's own your own time. So really look at what you are doing on an ongoing basis and strive to find way to automate what you are doing to put the time in to actually automate a system and then benefit from that. Now it may take a little bit more effort initially to get it going and but the rewards will be great.

So just a simple example on a personal front that I see most people. A lot of people spend a lot of time paying their bills. Now if you spend the time and effort you can pretty much automate with your banking these days. Yes, it takes a bit of time, you will have to set up this and blah, blah, blah, but at the end of day that effort will be rewarded, because you may never have to look at paying any bills ever again. So that's just a quick example of automation.

Now leverage is the other angle which is how you find ways to get more benefit of bucks out of your business and the concept of outsourcing and finding other people that can do tasks or other ways of doing tasks that need to be done in business in order to free up time and make your business more efficient.

Now in the modern world, it's getting even crazier because the global situation. So you really need to think out of the box in terms of attacking into other markets where you are not operating. If you are in the western world, there are tons of ways now to actually get services done overseas in different markets where you are helping them. The people in their country, but it's going help you. So look for ways to leverage your business.

The final aspect I am going to talk about is Capital Expenditure. So this is part of the value adding we talked about sometimes to automate or bringing better ways of doing things, you need to put capital in there. I have seen this getting badly wrong in many cases. So really make sure that the capital expenditure does stack out and the business case stacks up. Where it seems to go wrong is actually the drive from the benefits to realize them. So especially when we are talking about software, big software systems.

This system as it sounds is going to do whatever is there on board and for whatever reason it doesn't happen. So you need to have an ability in your business to drive through results, if you are putting new Capex in there. So you have to think about that.

Operations and improving operations is really a continuous cycle. I call it a continuous improvement cycle. I put in a lot of organizations. It's very simple. You need to measure the data then analyze the data then you need to find someway to do something about it and then be able to solve problems and continue that move.

You have to think about that in your business. If you are doing that on a routine basis, your operations will be optimized. So think about having our own continuous improvement cycle in your business. I hope that's been helpful. Thanks a lot.

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