The dos and don’ts of ensuring efficiency for small businesses


It may be true to say that we live and breathe all things ERP, but sometimes it’s good to take a step back and look more generally at the best practices for running a successful business.

No matter what industry you work in, efficiency is always the end goal. Time is money, and no business owner wants to be losing either of these things. It’s vital that you look out for the warning signs of an inefficient business as ERP can often solve your problems. However, there are also several things you can do yourself to maximise the proficiency of your business. With this in mind, we’ve compiled a list of the dos and don’ts for businesses that want to pack an extra-efficient punch:

Dos:

  • Create a business plan

This sounds like common sense, but you’d be surprised at how many people get started without a plan. A well-thought-out business plan will help you to get on the right track. It’s good practice to include financial targets, profit & loss and cash flow forecasts.

  • Know your financial situation

How much money do you have in the bank? How many invoices are still outstanding? And what are your monthly costs? In order to maintain a profitable business, you need to make sure that you always have the insight needed to answer these three questions.

  • Follow up on outstanding items

After you’ve delivered the goods or services to your satisfied customer, you deserve to be paid. Have reminders ready to be sent out and always follow up regularly. You are not a bank; don’t be treated like one.

  • Keep track of your sales

What sales opportunities do you have in the pipeline? At what stage of the sales cycle are they? What is the expected order size? What is needed in order to have them sign the order? These are questions that you need to answer to in order to plan ahead more effectively.

  • Control your stock

You need to know how much stock you have and the projected delivery times of certain products. It’s also good practice to know of other suppliers that you can use if need be. This will help you to manage the cash flow of your business.

  • Use more efficient tools

It sounds like a no-brainer, but many small organisations use inefficient methods of time and cost management to track their leads, manage stock or arrange their finances. By investing in a proper tool, you’ll have relevant and up-to-date information available at the touch of a button. 

  • Invest in your future

There are things you can do now to make life easier for yourself in the future. You can do this by using a software solution that gives you an easy way to communicate and share information with your future colleagues.

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Don’ts:

  • Only have a short-term vision

Always consider where you want to be in five years time. If you don’t have a clear, long-term vision then your business can become stagnant, causing you to miss out on valuable opportunities.

  • Rely heavily on one customer

We sometimes see organisations that have one large customer, which can ring alarm bells; what happens if this customer decides to get their goods or services elsewhere? Or what happens when they are unable to pay their bills. Do you have the financial strength to overcome this? Circumstances can change quickly, so you should aim to have multiple customers rather than focusing on just one.

  • Have the accountant update your financials

This probably sounds like a strange one, but having your accountant enter your financial records means that you have to retain all receipts so they can be sent in a shoebox every couple of months. As such, you won’t have the most up-to-date financial information available to make informed decisions.

 

These do’s and don’ts will set you on the path to efficiency, but an integrated ERP system is the one-stop solution to achieving all of these targets. Get in touch today to see how Dynamics NAV can help your business reach its destination of maximum efficiency.

 

Written by Mark Blackmore, Head of Direct Marketing, QBSgroup


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