How to streamline your business

It’s tough to build a profitable business from scratch – particularly in the current economic environment. And as your business evolves and grows, amassing new offices, computer systems, products and services, there is a risk that it becomes unwieldy and slow to react to competition. Revenue growth can slow, and market share shrink — in some cases threatening the very survival of your business.

One way to help avoid this scenario is to streamline your business.

Assess your core activities

Step back from the day-to-day concerns and think longer term.

Which of your products and services are succeeding and which aren’t performing as planned? Decide which products and services offer both a high percentage of sales and high profit margins. Then improve products and services which aren’t performing well, or drop them if possible.

Efficiency review

The next step is to conduct a wide-ranging efficiency review of your business. Areas to focus on can include your business: premises; facilities, information technology (IT); people and skills and professional skills.

When reviewing your premises consider the advantages and disadvantages of your current location.

Do an inventory of all computer systems. Are they robust and flexible enough to cope with an expansion of your business? Will the IT really make a difference to the quality of the product or service your business provides? If they don’t give you a competitive edge, can you change them to make sure they do?

For people and skills, consider whether you have the right people to achieve your objectives? Do they know what is expected of them? And do you have a training and development plan?

Become a lean business

The philosophy of lean business means getting more done with current resources by focusing on the essentials of your business and eliminating waste.

The lean business model includes working out the value of your product/service from the customer’s viewpoint; eliminating processes in your business that don’t create value; and making continuous improvements to your business.

Cut the paper trail

Do a quick audit. Is all paperwork done by you and your employees necessary? How does it improve performance and boost sales and profits? If the answer is no to any of these questions, then scrap the form filling.

Also review your physical storage (filing cabinets) and your data storage, which can be a large part of business IT budgets. Use a document-management system to archive paperwork for long-term storage and retrieval. This will free up the office space that is being occupied by paper storage. Other data can be archived electronically off your premises.

Cut costs

Review costs frequently, including the cost of your overheads (ranging from rent and salaries to advertising) and your assets (property and computers etc). Are there different ways of doing things or new materials you could use that would lower your costs? Also look at your supply chain. Try to renegotiate better deals with your suppliers.

Review your business finance. A small business loan or business overdraft may offer cheaper repayment terms than using a credit card.

Outsource

Paying a supplier to run some of your back-office functions like IT, HR or accounts, can help you cut costs and focus on your core service. Outsourcing is becoming increasingly popular among small business. Do your homework when choosing a supplier and read the fine print of the contract – paying particular attention to clauses about “service level agreements” and any penalties for exiting a contract early.

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

Barclays is a major global financial services provider engaged in retail banking (bank accounts and instant access savings accounts), credit cards, corporate banking, investment banking, wealth management and investment management services, with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 140,000 people. Barclays moves, invests and protects money and provides cash ISA options, home insurance, life insurance, a mortgage calculator, guides on how to buy shares and other services for over 49 million customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.co.uk