Streamlining your business removes wasteful or redundant steps to improve efficiency. Streamlining may involve modernization of your equipment, outsourcing organizational activities, and minimizing low-performing products and services to focus on what your company does best. In business, time is money, so a small business achieves several financial and operational advantages from streamlined operations. You reduce costs, attract more customers through nimble response times, drive higher revenue and compete effectively.
Better Financial Performance
When you cut wasteful steps and positions, the salaries you pay workers can be reassigned to profitable production activities. You avoid wasting money on equipment, tools, supplies and resources that don't contribute to profitable tasks. Your products reach customers quickly when demand is highest, and you attract more customers because of an efficient operation. High revenue and low costs means improved profitability and cash flow.
Faster Response Times
A streamlined operation leads to faster response times and makes your business adaptable and flexible. A company with a streamlined process is better able to modify production on the fly to satisfy a customer while maintaining profitability. Response times on special orders improve with streamlined operations as well. Retailers used to offer a four- to six-week turnaround on custom orders. As of 2014, that doesn't work. Customers expect rapid response in as few as one or two days.
Optimized Resource Allocation
Since streamlining reduces waste, it results in better resource allocation. Businesses can use enterprise resource planning tools to avoid redundant supply orders across departments and minimize excess inventory. With streamlining, you allocate your best people, equipment, tools and supplies to the most profitable projects and activities. When it takes 8 days to complete processes that once took two weeks, you gain several days in which resources are allocated to other profitable activities.
Companies in a given industry watch what the most successful companies do and mimic it. In some cases, streamlining is necessary to compete. A competitor that cuts production or process times in half has a significant advantage if you do nothing. It is better to take the lead in streamlining, but keeping up with top competitors is important. You avoid losing customers to businesses that serve your customers needs more flexibly and efficiently than you can.