Poor Operations Cost Your Business Money
Managing operations in your business is critical to the long-term success of your company. Poor operations can have serious consequences, and not least among them are reduced employee satisfaction and severe financial repercussions that may prevent your business from lasting. Failing to put in place business systems and monitor and adjust them using the proper business metrics will create issues across all aspects of a business.
Here are 5 ways that poor operations cost your business money:
Low Employee Morale.
When employees aren’t sure about what’s important, what the businesses’ goals are, and how they are being measured they tend to not perform at their capacity. This becomes an issue on a couple of levels. One, you’ve got employees who aren’t even sure what they are working towards, so they’re probably ineffective at best, and at worst they are hampering the business. Two, the uncertainty employees face will lead to morale issues making it difficult to motivate employees and have them commit to buying into the strategic goals of the company – because they don’t know what they are. These issues cost a company money because employees aren’t utilized to their full potential.
Loss Of Talent.
Employees are an extremely valuable asset. Losing them is costly, both in terms of money and productivity; you’ll have to replace them, which will cost you money, and they aren’t working anymore so that’s a productivity issue, at least in the short term. Employees aren’t going to hang around in a business with poor operations, vision, and a lack of opportunity. Talented employees, you know the ones that are really beneficial to your business, are going to be able to find other jobs, they’re in demand and always will be. Poor operations just opens the door for talented employees to take those talents elsewhere.
Hiring Will Suffer.
Similar to the situation with talented employees not wanting to stay somewhere with poor operations, talented individuals looking for new or appealing opportunities aren’t going to pick the business that doesn't operate well. You’ll be stuck in a high turnover, low employee engagement situation, and that's going to be a tough sell to potential who are good at what they do. They will have other more appealing options to take advantage of.
You’ll Likely Be Stuck Where You Are.
If you’re not setting up systems and metrics to track what’s important, you probably aren’t moving forward, at least not at the pace you need to be. On the surface, everything may look like it’s fine and you’ve got everything covered. However, business moves too quickly, nothing remains the same and in order to compete and thrive, you’ll have to evolve. If your operations aren’t running well, it will be hard to recognize opportunities, and even if you can, taking advantage of them will be difficult.
You’re Not Maximizing Your Customer/Client Base.
Most businesses with operational issues aren’t focused on client/customer service, even though to some extent most every business is in the customer service business. Putting in place some operational processes to get customer feedback is an opportunity to improve the business and build a devoted following of your products or services. Without a system to capitalize on the opportunities customers provide, other than just purchasing, you’re missing out.
The unseen costs of poor operations aren’t that obvious but shouldn’t be taken lightly. Make time to regularly review your processes and systems and track the metrics, at least the important ones, to move your company in the right direction.
Have questions about how to set up business systems and determine what business metrics matter to your business? Contact us for a free consultation.