Three places to consistently find hidden profit

One of the challenges many small businesses face is erratic or stagnant growth. Part of the reason for that is we get too busy in our day to day workload that we fail to improve the little things in our businesses that would make a huge difference, especially in terms of profit.

Such things as moving the most popular product closer to the sales counter or warehouse exit, or, improving our follow-up process to cash in on additional sales from loyal customers, or, streamlining invoicing so they get out faster and are simpler for customers to read. Little things that don’t appear to be worth the time or effort but make a massive difference to your bottom line over time.

For example, it was reported in the New York Times back in 2011 that Northwest airlines in America saved $500,000 per year by slicing its limes into 16 pieces instead of 10. Another example being when ANZ bank removed screensavers from all its computers, reducing energy consumption by approximately four per cent (or 6000 megawatts) and reducing greenhouse gas emissions by approximately 5000 tonnes per year.

As a small business you might not benefit from those types of numbers, but the effect is still the same. Small changes mean big results. There are key places to look for gaps (problems or areas for improvement) where small changes can lead to profit:

  1. Your internal processes
    The chances are in every part of your business there are ways to do things better. These could be found in your production line, distribution, marketing, finances, internal and external communications.
  2. Personal skills and abilities
    Improvements are not always about the business but also about the people within it. And it’s not just formal learning that’s important but informal learning as well in what we learn from our colleagues, our customers and outside interests.
  3. Your customer’s experience
    Often the greatest source of improvement comes from what your customers are telling you – or not telling you. Again, goes beyond official feedback and surveys because it’s often what they say in and how they act in the moment of doing business with you. If you recognise it.

Here are a few suggestions to put all this into action so you and your team can start addressing these three areas:

  • Start becoming a gap hunter. Look for things that can be improved. Be a gap hunter not an idea hunter. A mistake many businesses make is constantly coming up with ideas because ideas are a complete waste of time unless they solve a problem. So look for gaps. Just 10 minutes a day.
  • Have regular gap meetings. Get your team together once a week for no more then 10 or 15 minutes and talk about what gaps they have found and how to improve them. Make it a stand-up meeting also, keeps it short and snappy.
  • Delegate gap hunting to your staff. Most importantly let your team know they have your permission to find gaps. Let’s face it, as a small-business owner or leader your focus is on the bigger stuff and it’s your team you will find those small gaps faster and more easily than you.

Above all remember this. It’s about finding small achievable gaps within your control. Areas of improvement that are easy, quick and simple to fix. Don’t go searching for the next iPhone, find the next “lime” or “screensaver” in your business.

Nigel Collin, Business Coach and author of “Game of Inches”

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