3 keys to making the most of limited resources
Small business owners know how to do more with less. I think it must be part of their DNA. Successful businesses seem to be able to take limited resources and turn them into sometimes unbelievable results.
It doesn’t just happen without effort, though. It seems that whenever they face obstacles or challenges, they’re looking for ways around, under, over or through.
Creative problem-solving and making the most out of what resources are available is a way of life.
Continually looking for ways to do things better and more efficiently is what once helped Japanese manufacturers dominate their respective markets. Edward Deming, an engineer whose influence in the 1950s and ’60s helped put Japanese manufacturing on the map, once said, “Not a single day should go by without some kind of improvement being made somewhere in the company.”
While visiting a Casio factory in Japan a few years ago, this mantra was front and center in the conference room where we were meeting (and in other places around the factory). Deming espoused a philosophy that suggested you can’t insert quality into what you make after the fact — it has to be built in from the ground floor. In other words, he felt it was critical that those doing the work had ownership of the quality of what they produced. It helped Japanese companies like Toyota and Honda capture an automobile market previously dominated by Ford and Chevy. And electronics companies like Sony and Panasonic were titans back in the ’60s and ’70s before other manufacturers started to embrace the same mantra.
3 keys to maximizing limited resources
Increasing productivity and making the most of limited resources is a critical part of small business success. But the real secret is getting everyone in the business to do the same. Fortunately, there are three keys that will help you.
Make sure you have access to accurate information.
Focus on bottom-line activities to reduce costs.
Make your vision accessible to everyone.
This might sound like an over-simplistic solution to a pretty challenging problem, but let me explain why I believe these three points are so important.
1. Make sure you have access to accurate information.
Running a successful business involves a lot more than keeping people busy. It requires us to keep people busy doing those things that will help push the business forward, help it grow and generate profits.
Visibility into accurate and up-to-date information will help you make informed decisions. If you’re in the dark about what’s happening within your company, it’s hard to make choices about priorities. It could sometimes feel like consulting the Ouija board every time you need to make decisions on the initiatives that have the most potential value.
An easy place to start: Establish some basic metrics that tell you how your company is doing.
For example, most small businesses are very dependent on the sales cycle, so having that type of information at your fingertips could be very informative. Do you know your company revenues (this year, this month, this week)? How many sales inquiries does your company have this month? And how many of those sales inquiries are from potential new customers versus returning customers?
Of course it’s easy to get bogged down with too many numbers. You need to determine what type of information is important to help you make business decisions and start collecting it.
2. Focus on bottom-line activities to reduce costs.
This type of effort doesn’t require a machete, but rather a scalpel. Over the years I’ve noticed that it’s often small, incremental changes in productivity that have a huge impact on the bottom line. When everyone in the company is looking for small changes that can have a positive impact (whether it’s making adjustments to how they work, cutting costs or championing a new idea), the total gain can be exponentially greater than the sum of the parts.
Establish a way to judge new projects by the above-mentioned metrics before they begin so you can appraise the potential value of new initiatives against a standard. This makes it easier to determine if the new project is in line with your company goals, or if it should be abandoned to pursue something potentially more profitable.
Deming espoused empowering employees to make business processes better. According to Toyota, “Improvements and suggestions by team members are the cornerstone of Toyota’s success.” I think this applies to small businesses, as well as large manufacturers like Toyota.
I’ve observed that when you empower your employees with the ability to positively impact change — which requires everyone in the organization to be on board — great things happen.
3. Make your vision accessible to everyone.
Metrics and measuring make it possible for you to see what’s happening in your business, but that’s really only a start. Early in my career I worked for a small business owner who really understood the value of engaging the team. He not only shared the metrics he wanted to track throughout the month, he made sure we all understood why they were important and what he thought moving the needle would mean for the business.
He set business goals and objectives that corresponded with the two or three metrics he thought were the most important and posted them where we could all see them. He shared with us how we were doing every week. We talked about the things we were doing that were successful and how to overcome any challenges that made it difficult for us to meet our objectives.
At the end of the month, we would evaluate how we did, discuss things we needed to do better and celebrate our successes. Our little company of four people worked together as a team to achieve some pretty impressive results.
Maximizing limited resources to get the biggest bang for your buck doesn’t just happen. It takes a lot of creative problem-solving, some discipline and a willingness and commitment to look at how you do business and ferret out ways to improve.
When “Everyday, perfection” becomes your company’s mantra, and everyone is looking for ways to do better, go around, under, over or through, your business will be a profit-making machine.