Member Article

Assessing your business efficiency

With Business Link

Most businesses have some potential to make savings, sell more, streamline processes and boost profitability. With the day-to-day pressures of running and managing a business, it’s often difficult to find time to step back and assess your business processes and identify areas for improvement. But the profitability of your business can depend on reviewing how efficient and effective your operations are. Below, Nicki Clark from Business Link highlights key questions businesses might need to ask themselves when reviewing business efficiency, and looks at how a new online tool can help.

1. Is there a need to review my business’ progress?

It always pays dividends to think about long-term strategic planning and carry out regular reviews. Through time markets develop, trends shift, customers’ needs change and technology develops so it is important to continually review your situation to stay ahead of competitors.

2. If so, what is the next step for my business?

Developing a clear business strategy will help to answer any concerns and show practical ways forward. When assessing your current position ask yourself: What are my markets? How can I gain competitive advantage? What external factors may affect the business’ ability to compete? How am I measuring success?

3. How can I assess my business’ core activities?

When assessing your core activities start by defining what your product or service actually is and then ask what makes it different? What benefits does it offer and how can you improve? Once you have a clear picture of what your products or services set out to achieve, you can start to examine ways to improve your performance in every area of your business.

4. Can efficiency be improved in-house?

Many new businesses use a short-term, reactive way of working in the early stages. This offers flexibility – but can cost time and money as you move towards concentrating on growing and developing it. One question to ask yourself at this stage is whether any internal factors are holding your business back and if so what can you do about them? Areas to consider that could benefit from potential improvement include quality management, stock control, delivery and supply chain management, purchasing and ordering and information management.

5. How can my business benefit from implementing best practice?

A best-practice strategy can help your business become more competitive, increase sales and develop new markets, reduce costs and become more efficient. Other potential benefits include improving the skills of your workforce, improving quality and enabling you to respond more quickly to innovations in your sector.

The Business health check tool, which was developed in association with the Institute of Chartered Accountants in England and Wales (ICAEW) and the British Bankers Association (BBA), asks the user a series of detailed questions on issues that impact a business’ cash flow - from employee costs and supply management to business administration and sales projections. Results are fed back with a status report on the business’ overall operational health, outlining potential risks, areas for improvement and useful links for further advice.

For Business Link services in your local area, call 0845 600 9 006 or visit www.businesslink.gov.uk. Business Link services in the North East are supported by the European Regional Development Fund, through the Government Office for the North East, and One NorthEast.

This was posted in Bdaily's Members' News section by Ruth Mitchell .