Helpful Tips for Better Operations
Operations management is a vital skill your business must have to run their company efficiently and save money over the long term. Here are some key elements of operations, and tips on how to optimize each within your company.
Cost Management
For most businesses, there are two ways to increase profits: (1) increase sales, or (2) decrease costs. Cost management is the proactive pursuit of the latter — reducing costs such as equipment, office space, travel, technology, insurance, or third party providers.
Why it Matters:
Decreasing costs can maximize revenue, and lead to sustained viability for your business.
Tips to Optimize:
- Create a budget for monthly, quarterly, and annual expense tracking. Look for recurring expenses that could be reduced by switching to a new provider for less money.
- Negotiate provider contracts aggressively upfront, and review them at least semi-annually to flag unwanted price increases.
- Consider offering to pay providers upfront where possible to strike a cost-saving deal.
- Work with your sales team to forecast seasonal fluctuations that would trigger cost changes your company should prepare for.
Data, Tracking, and Analytics
Gathering, tracking, and analyzing data on a regular basis to gain insights about your business.
Why it Matters:
Tracking data helps you notice problems sooner, and respond quickly. Use your findings to make recommendations on cost-cutting measures, the direction of the business, or service focus.
Tips to Optimize:
- Track both qualitative data such as team goals and milestones; and quantitative data such as impact, growth, and scalability.
- Collect data monthly, at a minimum, while also saving daily and weekly data if further analysis is needed.
- Research industry standards and best practices to improve your own organizational workflows and processes. Prepare detailed reports of improvements for record-keeping, even if they are brief.
Human Resources Management
The management of talent resources and labor for your business.
Why it Matters:
Mishandling of hiring, training, and retaining employees is a common pitfall for companies that causes them to overspend on turnover or even legal disputes.
Tips to Optimize:
- Recruitment, onboarding, and training — Give new employees ample time to obtain the knowledge, skills, and behaviors needed to become effective members of your company and culture (typically 2–6 months after start date).
- Compensation and rewards — Consider alternative employee incentives such as remote work, parking subsidies, or office food; in addition to common benefits plans such as 401(K)s and medical insurance.
- Professional development — Allow employees to earn professional certifications. Plus perform annual peer and manager reviews. Development can serve as a strong motivator.
- Attrition — Conduct exit interviews to understand turnover trends that you can remedy. Remember, it costs much more to replace a good employee than to retain one.
- Diversity and inclusion — Pinpoint opportunities to improve the attraction, recruitment, and retention of diverse talent. Offer ongoing training to support this effort. Remember, diverse teams perform better (Source: Harvard Business Review, 2016).
Third Party Provider and Vendor Relationships
Any relationship with a third party provider or vendor where your business pays for their service. This may include large and small costs such as lawyers, administrators, accountants, or suppliers, etc.
Why it Matters:
Providers and vendors help you not only cut costs, but also improve turnaround times, access skilled professionals directly, and leverage flexible staffing to increase productivity.
Tips to Optimize:
- Vet providers by interviewing multiple before signing a contract with one.
- Have clear deliverables and timelines with your providers and check that they’re on schedule regularly.
- Require your providers to deliver regular reporting of their work to you, as a form of auditing their service. Ensure that you can access this information real-time or within a 24-hour turnaround.
Online Presence
The social platforms or publishings used to share general information or articles about your business. For example, your website, LinkedIn, Medium, Twitter, Facebook, Instagram, Google, and others like Yelp.
Why it Matters:
A cohesive online presence helps you communicate more clearly with your customers, investors, and stakeholders — this type of marketing can potentially increase your sales and profits.
Tips to Optimize:
- Stay up to date with your online postings, as you may miss a customer lead otherwise. Recency bias is real.
- Reserve social handles early, to ensure your identity is consistent across platforms.
- If working with an external public relations team, sync their release schedule with your product release schedule to maximize impact.
Compliance
A guidebook for the behavior and expectations of employees and management.
Why it Matters:
The goal of compliance is to make your workspace a functional environment while building processes that improve efficiency, create consistency, and help you avoid regulatory missteps.
Tips to Optimize:
- Create internal tracking systems to stay compliant with recurring certifications or filings, which can be critical in avoiding fines and other negative consequences (e.g. business licenses).
- Set policies that describe how your company functions and more importantly, how employees should contribute to the well-being of this effort.
Operations require you to develop your skills around cost, people, and relationship management alike. Be prepared to oversee and optimize various elements — contributing to your company’s success.
Kaego Ogbechie Rust is CEO at Foresight Advisors — working with foundations, investment firms, non-profits, and for-profit ventures — offering comprehensive support across vision & strategy, investing & financing, and operational planning during critical periods of your growth.
If you’re looking for help, contact kaego@foresightadvisors.co or visit www.foresightadvisors.co.
—
Read More:
New Book Release
• The Venture Fund Blueprint — Our #1 Best Selling book helps you learn to build, launch, and grow your organization — with step-by-step guides from crafting messaging and operations to running finance and legal.
Pitch Decks & Messaging
• How to Make a Pitch Deck for Your Fund
• How to Write an Investor Update (With Example)
• How to Write a One Pager
• Building Your Fund’s Investment Thesis
Launch & Growth
• 12 Steps to Scale a Business
• The 10-Point Checklist to Launch Your Business
• A Launch Checklist for Emerging Manager Funds
Market Size & Viability
• How to Calculate Market Size
• Know Your Niche & Cost
• How To Measure Results
• The 9 Point Due Diligence Checklist for Fund Investments
Sales & Operations
• 7 Steps To Assess Your Competition
• Competitive Advantages That Last
• Developing a Go-to-Market Plan (GTM)
• 5 Ways to Productize Your Business
• Finding The Right Customer Profile
Finance, Tax, & Legal
• How To Choose a Lawyer For Your Fund
• A Simple Way to Track Your Business Finances
