Even though the economy hasn't quite rebounded, small businesses saw a sales increase of 10 percent in May 2013, writes Inc.com. That equaled April's increase. The service and construction sectors saw the most growth, but the economy is still experiencing difficulty. With that in mind, it's important for small businesses like yours to have every possible edge. Focus on efficiency more than ever before to gain a leg up on the competition.
Running Your Small Business More Efficiently
Frequent studies on workplace productivity show that countless factors can affect the efficiency of employees. Most recently, the Center for Disease Control reported hangovers due to excessive drinking cost the economy $220 billion in workplace productivity. The Atlantic reported 72 percent of lost economic cost was due to productivity. Time is precious, so be wary and get creative when it comes to maximizing workplace efficiency and productivity.
- Let your employees work remotely -- With fewer people in the office, you won't have to invest as much money into real estate. Also, the Wall Street Journal reports that employees who work from home are more efficient and take fewer breaks.
- Hire help you can afford -- If hiring another full-time employee or two doesn't fit your budget, you can always hire a part-timer, intern or even subcontract the work out until you can hire full-time employees. This also allows you to see how someone will fit with your company before you fully commit to them.
- Review supplier contracts -- Odds are your supplier has either increased prices or is thinking about how to do it. Compare suppliers, but don't necessarily go with the cheapest - a lower unit cost may look appealing, but if it takes more time and hassle, the savings may not be worth it. If you have a supplier that provides great service for the price you pay, paying a little extra can be worth it.
- Analyze how your time is used -- If you can cut a 10-step process down to 9, that's a step saved. Online tools like Harvest and Freckle help you monitor your time and analyze the results. Don't just do this now, continue doing it on a regular basis.
How to Keep Your Employees Happy
According to a Psychology Today report, workplace happiness has a great effect on productivity. Keeping your employees happy is one of the biggest steps you can take toward a more efficient company.
- Keep wages above the industry average -- Costco and Walmart both compete on low-price merchandise. Forbes noted earlier this year that Costco pays a decent salary to its employees who, in return, make double the amount of sales per employee than Walmart-owned Sam's Club achieves from its workers, whose pay is much lower. Keeping your own employees motivated with good pay can be a big boost toward productivity.
- Consider profit sharing -- Profit sharing, where you pay employees a bonus when profits increase, can be a great motivator to get the most out of your employees.
- Add other perks and benefits -- Although money is a great motivator, it's not the best motivator over the long haul. Many companies offer additional perks like gym memberships. Others have hired massage therapists to give relaxing massages when employees have to work long hours. Be creative and seek feedback from your employees.
- Give them power in the decision-making process -- Do you react more positively when you have a say in the decision-making process? Your employees will react better if they have a say.
- Let employees experiment -- Are you out there on the front lines every day? Your employees are, and they might have powerful insights that you do not. Set up a system that allows them to experiment to increase sales. If they can, make sure you publicly acknowledge and reward their accomplishments.
Above All, Embrace the Challenge
It's not easy to keep your business moving along during difficult economic times. But, if you can learn to survive (or even thrive) in a struggling economy, consider how well you'll perform when things do turn around. Keep an eye on employee morale and stress. When a company struggles, it doesn't just affect the CEO. Be transparent with your employees about the challenges and goals of the company. Lead your team with confidence and encouragement and you will have a loyal, successful and productive company.
About the Author: Dan Stelter is a freelance business/finance web writer and currently runs his own web content firm. Connect with him on Google+.