Cut costs, build sales on a budget

Q: I have a small business with 10 employees. I am concerned that costs keep going up while sales are not. I know larger businesses have cost-reduction and sales-building programs, but I can’t afford to hire additional people to work in these areas. Is there anything I can do?

A: There are several steps you can take to reduce costs and improve sales. You can start by developing two important documents. The first contains job descriptions for every task you need to have filled in your business. The second is a detailed description of every process that is required in your business.

Job descriptions

Job descriptions should be built around tasks, not people. If you start with tasks, you can see everything that has to be done. After that, you can assign staff to perform the listed task often for less than a full-time assignment.

An example of this process might be to assign a sales representative to also handle marketing tasks and perhaps product development as well. Each task may require one-third of the employee’s work day. This allocation of time can be adjusted as conditions warrant, of course. In this way, employees become more skilled by enlarging their capabilities.

They also become more aware of how the business operates and how they can be more effective. With a limited number of employees, diversified experience can lead to greater accomplishment than specialization. It is also important to note that every task should be improved over time and not just merely carried out.

Process descriptions

Process descriptions are crucial for a business to improve operations while providing accountability for management to assess performance. Process descriptions should be constantly reviewed for areas of possible improvement. Improvements can be made in quality, speed and customer experience, as well as other areas.

Improvements can also reduce costs by improving productivity. Accountability can be measured by an employee’s performance in both carrying out the process and also looking for ways to improve it. In this way, the entire organization can be on a mission to grow its capabilities while improving its operations.

Experimentation

Many people in organizations learn how to do one task and keep repeating that task in the same way over and over throughout their career. In effect, someone who has worked this way for 10 years has one year of experience repeated over the following nine years. There is not much learning and growth in this process.

The key to both individual and organizational growth is constant experimentation with new ideas and methods. The tried and true will always be appealing to those who want things to be like they have always been.

But those who try new things and value change as a means of driving both personal and organizational growth will always be in the forefront of innovation and progress. And they will make a difference in your organization.

Richard Walton has been a certified SCORE mentor for 14 years. He is a member of the Lean Enterprise Institute, Academy of Management and the Online Learning Consortium. Questions may be emailed to him at rwalton 432@gmail.com or sent by mail in care of The Herald-Mail, P.O. Box 439, Hagerstown, MD 21741, ATTN: Ask SCORE column.