Evolution Business Systems talked to Steve Tyshing at Haines Muir Hill, Chartered Accountants and Financial Advisers about his 10 Point Plan for Conducting Your Business Efficiently.
1. Stop, Start, Keep survey
The concept here is a short staff survey – a “one pager” which asks all staff to list up to 5 things the business should STOP doing, 5 things it should START doing and 5 things it should KEEP doing. This will produce some very practical suggestions for efficiency improvements and enhancements.
2. “Beauracracy Busters” Committee
Appoint a small committee (4 or 5 people) from different departments within the business to review layers of beauracracy. One of the best ways of making efficiency gains is to review “red tape” that has built up over time. Have this committee report directly to the MD or CEO.
Review and assess technology capabilities across the business. Traditional sales forces are being replaced by on line ordering. Quoting and estimating costs can be reduced by giving customers the ability to use internet portals to provide information for initial quotes…. and so it goes.
4. Skills Review
Do the personnel within your business have the skills to “cope” in the modern business world? Consider training, upskilling or recruitment to improve skills for efficiency gains often “in-house” or“on the job” training will be sufficient to bring skill levels up to speed, so it doesn’t need to be expensive!
5. Talk to the “Coal Face”
US management guru Tom Peters called it MBWA – Management By Wandering Around! Listening to people on the front line of production, purchasing, customer service etc can provide great insights and wisdom into how fundamental things happen – the so called “1%ers” that management never gets to hear about!
Recent surveys indicate that ease of doing business and customer service generally outweigh price, when customers consider doing business with a supplier. Any cost reduction program should be done with this in mind.
6. Discretionary costs review
Most cost analysis breaks costs into“fixed” and “variable” components. A further breakdown of “variable” costs to identify “discretionary” costs will allow a business to consciously decide whether or not to incur costs classified as “discretionary” after evaluating their worth to the business.
7. Avoidable costs review
Costs which are unnecessary and can therefore be classified as “avoidable”should also be identified for obvious reasons!
8. Supply arrangement/terms
Review key supplier contracts, agreements and terms. Renegotiate prices, discounts, rebates, order/delivery arrangements and payment terms. Also consider quotes from alternative suppliers as further “leverage” in these discussions.
9. Staffing/manning levels
For most businesses payroll is a substantial cost. Review overall staffing/ manning levels and consider use of contractors as an alternative to employees. This may also be the time to critically asses performance and counsel any non-performers.
10. Finance Costs
As reported in our last client newsletter, banks are aggressively chasing new business. Now is a good time to review/restructure your borrowing facilities. A number or our clients have done so successfully in recent months. You may not need to consider the whole“10 Point Plan” but there are bound to be some items on the list which will add to your bottom line!
This article was provided by Haines Muir and Hill, Chartered Accountants and Financial Advisers. For further information contact them on 9840 2200 or visit their website here