5 Steps to a Lean and Successful Business Machine
The idea of running a lean business isn't a new concept, but in the age where 1 in 15 small businesses will close before the end of 2020, many owners are looking for ways to "trim the fat" to drive profits least expensively. However, the concept of a lean business goes beyond the idea of just saving money.
Operating a lean business in 2020 means creating an adaptable company that runs most effectively and efficiently to deliver the most value to customers while still generating maximum profits.
Five Steps to Transform Your Business into a Lean Machine
Streamline and Automate Technology
Technology has changed the way businesses operate. Lean companies should look towards technology to automate as much of their business as possible - with careful oversight.
With an automated process, you can streamline the mundane, time-consuming tasks that require an abundance of staff-hours, yet technically keep jobs, like fulfillment and distribution in house. You choose what and when to automate. It's a controlled approach for the arduous tasks your business regularly does.
The best opportunities to implement automation technology include your sales process, calendar and email management, and client onboarding.
Anticipate and Adapt
Customers are always your best source of information. Let their pain points, requests, and (yes feedback) help you develop the next iteration of your business strategy.
Your customers provide revenue and help your business grow. Give them what they want instead of telling them what they need. Doing this allows your business to evolve and improve your service offerings. You can also look to specific customers to test new concepts before they go live if it’s something they have requested.
Cut Overhead Costs
A classic tell of lean business is its ability to maintain smooth and consistent operations with low overhead costs. Every dollar saved in overhead is another dollar you can use to grow your business.
Start by cutting the low hanging fruit:
Utility Bills. While most utilities are non-negotiable expenses, you can make a few small changes on how you use them to save each month significantly. Consider adding a programmable thermostat and powering down computers and printers at the end of each workday.
Go paperless. We live in the cloud. By reducing your dependence on paper, you will save thousands per year.
Rethink your office. Does every employee need their own office? Do you need conference rooms? Rethink your square footage needs and consider a smaller space with a more purposeful design and slash your rent in half.
The point is the deeper you dig, the more opportunities you will find for cutting overhead costs
Update your Management Strategy
Reviewing how your teams operate and then assigning smaller but related goals to those teams will help achieve your overall operational objectives or cascading goals.
With cascading goals, it's essential to keep a clean line of sight. Help your employees see how their objectives contribute to the overall company goals. Employees with a clear understanding of how their efforts impact the team are likely to have a higher buy-in, and will work harder to help the company succeed.
Make Better Decisions
Work towards basing business decisions on the data you have in front of you. Successful, scalable companies use advanced forecasting and management accounting to get actionable data for complex business decisions.
This data can also help evaluate customer relationships, optimize pricing, and develop successful marketing campaigns
Build a Solid Foundation
Just because the term "lean business" has become more generalized doesn't mean you should toss out the old principles of reducing waste and eliminating inefficiencies in your day-to-day business operations. Profit margins will always have a stronghold over your company's profitability. So, the less you spend to make money, the more your company is worth.
As you focus on leading a modernly lean business, also concentrate on operating a fiscally efficient company. Remember, you don't go from running a cash strapped to one that is financially disciplined in a matter of months. It takes years of strategic planning and execution to develop a lean business unit. However, you can give your business a headstart by intentionally establishing the right foundation today.
