Felix Dennis correctly stated “Ideas don’t make you rich. The correct execution of ideas does.” So what is correct execution? It is not only doing things right, but also doing the right things. And the right things are the ones that will produce the best returns and outcome for your company, including enabling efficiencies for your entire organization.
In my over two decades of founding and running a company, I have adopted many cost saving techniques that have paid off handsomely over the years. Efficiencies are best produced by cutting fat, enabling multitasking and automating repetitive tasks. Here is a list of 10 efficiencies that worked very well for me that may work just as well for most CEOs and entrepreneurs.
Shaving Costs without Impacting Revenue
- Average marketing costs at a company are expected to have a range of 9-12% of total company revenues. Diverting much of your marketing budget to create “set and forget” lead generating assets and processes will enable your marketing dollars to generate returns year after year. Building a professional website in WordPress and packing it with valuable content leading to gated prime value content will amass leads and email addresses. WordPress is a recommended CMS platform due to its open source status, low cost of maintenance, high support with themes and plugins to do pretty much anything you need, and its ubiquitous presence and support. Once a website is properly designed and setup, adding content and value becomes very easy.
- A robust digital content strategy to include writing a blog leading to whitepaper, webinar, podcast, video and eBook assets will create a constant stream of traffic to your website generating leads and sales. Train yourself to jot down ideas and real life experiences that are valuable to your clients as you encounter them in your every day’s work. Then when time permits, create a blog post outline and expand it to formulate a 600-1200 word blog post. Appropriate content brings the right traffic to your website, which will create valuable leads. Leads include email addresses. If you are not good at authoring content, hire an editor or a ghost writer to do it for you, but oversee and add value to his or her work. You can find writers on Craigslist and Upwork, or outsource to agencies like textbroker or Ghost Blog Writers. Consider hiring a professional translation service to convert your content into the top 10 languages used on the web. It can more than double your web traffic. Build your website content over time. Build it with pride. Build it with passion!
- Use CRM software like Salesforce.com or Microsoft Dynamics to store all your leads and track their interest and activities. Institute automated lead nurturing workflows and process to touch these leads on a frequent basis with valuable information. Out of mind is out of sight, as they say. In real estate, the 3 top priorities are location, location, location. With lead nurturing, it is timing, timing, timing. But you don’t want to annoy your contacts, so make sure the info you provide them is of value. Draw from your blog posts to create valuable email content. Obey Can Spam Laws and subscribe to a 3rd party email router like SendGrid, MailGun, MailChimp, Constant Contact… to avoid spam filters and being blacklisted.
- Companies spend on average 7-15% on sales. If you add sales staff salaries, commissions, travel expense and other overhead, costs can quickly accumulate eating up into profit margins. In many cases, internal sales efforts driven by a proven lead generation process with tested metrics delivers as good or even better results than an outside salesforce. Inside sales people are paid half the salaries, earn half the commissions and require much less overhead to operate. But without a consistent and scalable lead generation process, a proven sales process and metrics to track results and performance, a profitable engine of growth cannot be attained. With the above recommendations in place and by instituting an internal sales department that can follow up on leads and close business, sales costs can be significantly reduced.
- Your Product/Service Operations take up the lion share of expenses. For many businesses, a unique selling proposition (USP) is so hard to establish or maintain. Competition is all over the place. As soon as you identify something unique, copycats pop up from nowhere claiming or offering the same. In a global economy, you even have to compete on uneven fields and terms. So how do you create and maintain a USP and fight commoditization and price erosion?
Have you consider becoming ISO 9001 certified? Maintaining a quality management system forces you to think about, and detail, all your processes, monitor their execution, identify areas of improvement, attend to these improvements, track noncompliance or nonconformance and proactively address the areas that will reduce and eliminate them from reoccurring. It will detail all your supplier approvals, training requirements, quality standards and much more. With all the activities and records that ISO requires you to execute and document, you can generate operational metrics that can help you institute automation where possible, eliminate waste, enable multitasking, and crystalize and better articulate your USP.
- A good customer relations strategy should be at the core of your operations. Do you have an analytic process to measure your customers’ satisfaction? Sales numbers alone are not a good enough indicator. Institute an objective survey to measure customer satisfaction and track its results on a yearly basis. You can use paper surveys or online surveys like SurveyMonkey or SurveyGizmo. Why is it important? It helps keep a close monitor on the pulse of your client base. Also, while everyone talks about offering great service and quality, very few have the numbers to prove it. Wouldn’t it be helpful to back your claims with numbers? These numbers can very well be part of your USP and no one can copy them! Promote your survey with each invoice along with quarterly emails to solicit as many replies and as much useful input as possible. With SurveyMonkey, you can have up to 10 questions and up to 100 replies subscription for free! Good survey results are also a great topic for a blog post, press release, email newsletter and lead and client nurturing emails.
- Accounting and Finance should not take up much of your operations costs and why should they? Accounting software is inexpensive and works! Automation is so widely used that much of the old mundane accounting tasks are now handled with a single push of a button. QuickBooks for instance offers automation of tax reporting, payroll, bill paying, invoicing, bank and credit card accounts reconciliation, online banking and integration with PayPal and credit card companies, and a lot more. Report generation and financial statements are also automated. You can get instantaneous income statements and balance sheets, cash flow forecasts, delinquent accounts and a myriad of useful reports. By automating repetitive and mundane tasks, your accounting can be completed each month in a day or two giving you full control over accounts payable, receivables, cashflow and all other vital signs of your company with minimal efforts and costs!
- Why not also automate Human Resource functions? Hiring has become so much easier with LinkedIn and online services like Craigslist, Indeed and ZipRecruiter. Gone are the days where companies spent tens of thousands of dollars on Sunday paper listings and headhunter fees for most of their job openings. Filters, algorithms and even artificial intelligence are helping narrow the selection of candidates weeding out all inappropriate, unfit, unqualified and spam applicants eliminating the need to sort through thousands of resumes and applicants. Also, many companies are offering cafeteria style HR benefit packages to include medical insurance, holidays, vacation and 401(k) with Defined Benefit plans for maximum tax deferred income. If you have not looked into Defined Benefit retirement plans, it is worth to give them a visit.
- Nowadays most IT functions can be outsourced and most IT assets can become subscription based eliminating expensive hardware, software and maintenance costs. Implementing automation will require IT support. But the ROI can be significant. You don’t have to hire an IT team, you can outsource the work while still maintaining control of your processes, schedule, costs and quality. If you want to stay local, issue 1099s wherever you can. If you must hire an IT team full time, look to opening back-office operations overseas. International IT staff can be hired at a fraction of the cost of their local counterparts. You can find them on Fiverr, Credo, UpWork/eLance and Freelancer… Lower further your IT overhead by subscribing to Gmail, file sharing, backup, MS Office, Google Suite, Adobe Suite, web design, SEO and CRM services… Ubiquitous professional cloud products coupled with freelance IT staff hired only as needed will help you streamline your operations, reduce overhead and minimize down time disruptions.
- Learn all your exit options early and reevaluate each year. Many CEOs review their exit strategy on a regular basis. They have a fiduciary obligation to their stockholders to present them with all options and offers. SCORE developed the Exit Strategy Canvas to educate CEOs about how to get their companies ready for an exit. If however you are the business owner, there is still the option of holding on to your company for its entire life span and then “soft land” it when disruptive forces in the industry make the business nonviable. It is no secret that most potential acquirers are often looking for minimizing acquisition risk, aka paying as little as possible for your company! By deciding to hold on to it, you can maximize its cumulative earnings potential. Here are reasons why you should seriously consider keeping your company:
- It's taken you so much sweat, tears and blood to get here, so why sell the golden goose when it is finally laying you a golden egg every month, quarter and year? Often holding onto your company for 3+ years will net you more income than selling and will maintain your full equity in the company.
- By not constantly working towards an exit strategy, you can eliminate the overhead involved in getting it ready for an exit and take advantage of legal tax loopholes to reduce your tax payments. This will enable you to keep more of your hard earned income and invest it in the company or elsewhere! This often also means that on paper, you are diminishing your profitability and therefore the value of your company. But if you are not selling it, who cares?! The lower value is only on paper while in practice, you are minimizing your taxes and maximizing your net income.
- Invest tax savings in other ventures and diversify your portfolio to hedge your risks.
- Many entrepreneurs regret selling their company too early and often do not know how to invest their payout to achieve earnings that are commensurable with what their companies were generating for them, leading to seller remorse and lower income.
The Benefits Gained from Creating Efficiencies Are Cumulative
Shaving off sizable costs from each department and holding on to your company for a longer period can easily double your profits and more than double your nest egg due to compounding. Efficiency improvements throughout different departments in your company improve your bottom line. With higher profitability you can:
- Reduce debt and interest payments, increasing your net earnings cumulatively
- Decrease or completely stop worrying about cash flow forecasts, channeling your needed energy elsewhere
- Extend the value and life of your company and its profits
- Provide the cash for further investments in the company increasing future profits
- Divert profits to defined benefit / 401(k) retirement plans providing you and your employees security and ability to diversify risk in other investments to earn more income.
Small company CEOs are applying digital strategies today to create departmental and interdepartmental efficiencies with real impact on their bottom line. Simultaneously and sometimes unwittingly, they are orchestrating incremental but comprehensive digital transformation of their companies.
Worry about destructive revolutionary trends, but more about evolutionary improvements that you are not bringing on a daily basis to your operations. The little things will quickly add up! Efficient execution will make your company much more effective.
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