Estimated reading time: 3 mins
When it comes to improving profit margins, many businesses follow the same path of logic: cut expenses and increase revenue. However, they tend to overlook what has the potential to make the biggest impact: the processes. In fact, some businesses don’t have clearly defined processes put in place.
The things you do each day to keep the business running are processes. If you want to start evaluating your processes and putting standard operating procedures (SOP) in place, start with these five areas of focus.
Hiring and Onboarding
Hiring and onboarding are one of the most crucial business functions. The longer it takes you to get a reliable employee into a role, the more it will cost your business in lost productivity. Creating a streamlined system from the day a job description is drafted until the day a new employee is fully comfortable in their role is paramount.
When evaluating your hiring and onboarding process, look at all the steps that are included – posting jobs, tracking applicants, screening applicants, scheduling interviews, etc. Create a timeline and discern the places where you’re lagging. Survey your employees to ask for their honest input on the hiring process. Then, invest in automated screening and applicant tracking programs to streamline this essential process.
Scheduling and Payroll
Scheduling and payroll can be incredibly time-consuming. However, they’re necessary to ensure that you have staff operating the business. After all, if you don’t have anyone scheduled or don’t pay your employees on time, they’re probably not going to show up to work.
Evaluate how long it takes you to schedule and pay employees currently. Consider outsourcing your payroll to a service provider like payrollserviceaustralia.com.au rather than handling everything in-house. Investing in smart scheduling software can help you use AI to forecast and automate scheduling needs based on historical trends within the business.
Invoicing is a process that commonly gets overlooked in business. The longer it takes you to process invoices, the longer it will take you to get paid.
Implement a steadfast invoicing schedule and stick to it. Set aside time every week to ensure that invoices are sent out. Schedule another timeframe to make calls to follow up on overdue invoices. By having this task scheduled as a standard business process, you can improve your cash flow and mitigate overdue accounts.
Accounting and Tax Preparation
Accounting and administrative tasks often get put on the backburner in a small business. For entrepreneurs, there’s often a mad rush to get tax paperwork organized and filed each year. Additionally, falling behind on accounting means that you could potentially have no idea what’s happening with your business finances.
Schedule time each week to update receipts and cash tracking, as well as monthly times for updating accounting documents. Don’t hesitate to use apps to streamline the process or hire a virtual assistant to help keep you on track.
Attaining new customers can cost your business up to five times more than retaining current customers. Additionally, keeping the customers you have can drastically improve your profits. That’s why customer care is an essential business process.
Evaluate how long it takes for you to respond to customers through various channels, and how long it takes to sort out their concerns. You should also evaluate your customer after-care strategy. Rather than waiting for customers to contact you, what proactive follow-ups do you have in place to help them?
Identify which channels you’ll be driving your customers through for support. Consider adding a canned response to give people on social media to direct them through the proper channels. Having a simple ticket tracking service can also help you stay on top of complaints and questions.
By starting with these five key areas, you can begin to put SOP guidelines in place to improve your productivity, efficiency, and, ultimately, your profitability.