Steps to Improve or Grow Your Business
by Ron Kurtus (revised 20 November 2011)
Every business venture—whether a one-person operation, large corporation, or business within a business—can follow simple steps to improve. First it is necessary to have a vision or idea of what to improve. Then there are steps to follow, including measurement, organizing, reducing costs and getting more customers.
Questions you may have include:
- What does "improvement" mean?
- What do these steps entail?
- What are some examples?
This lesson will answer those questions.
Business improvement means to move forward from the present situation. That could mean to increase profits, reduce losses, get more customers, expand the markets, become more visible in the community, go public or a number of other items deemed desirable.
To improve, you must have a vision of what you want to achieve, where you want to go, and what you want the business to become.
Five improvement steps
If you, as a business leader, have an idea or vision of an area to improve, you can set that process in motion by following five steps.
- Measure where you are right now,
- Organize the business operations,
- Reduce costs,
- Get more customers and business, and
- Measure your progress to verify the improvement.
1. Measure where you are
Although you can get a "gut feeling" that your business is improving, the only real way to verify it is by some valid means of measurement. This is done both before and after some improvement effort.
Measurement criteria must be real and hard, based on money or return-on-investment (ROI). Measurements of such things as customer satisfaction are soft measurements and may or may not lead to better profits. That is not to say you should measure such items, but there must be a definite, measurable correlation between it and monetary gain.
2. Organize operations
By organizing or re-organizing your operations and processes, you can make your business a more effective machine. This includes defining your goals, planning, and using the ISO 9000 standards.
(For more information, see Succeed in Business with ISO 9000.)
Some companies consider making a new organization chart (org chart) a way to re-organize their business. All that really seems to happen is that the same people are doing the same work, but now they have different titles. New organization charts are a standard joke in the business world.
The ISO 9000 philosophy concerns documenting what you do and then doing what you say you do.
3. Reduce costs
By using Total Quality Management (TQM) methods and tools, as well as other similar concepts, you can reduce wasted material, effort, and time in making, selling, and delivering your product. The result is an improvement in the company's bottom line and an increased competitive advantage.
(For more information, see Succeed with Total Quality Management.)
Since TQM became popular in the early 1990s, there have been a number of similar initiatives such as re-engineering, six sigma, and such. Some have been successful and some disastrous. Common sense and good business practice is the most important thing in applying these concepts.
4. Get more customers
By satisfying your customers with high quality products and extra service, you will get repeat business and referrals. Of course, your price must be competitive, and they must have easy access to your product.
Although marketing and advertising are important to get more customers, quality, service and customer satisfaction are what keep a business successful in the long run.
5. Measure again
Measure again to verify your improvement.
Improvement can be done in all forms of business. Following are some examples.
A computer consultant wants to improve his one-person business to get more clients.
He can determine how much he is making per hour of work, how effective his advertising is, and some other measurements of where his business has been.
By organizing his business and how he works, he can be more efficient. This will allow him more time to spend on marketing his services. He can tune his processes to reduce wasted time and errors made.
By concentrating on quality, he can improve customer satisfaction and get referrals. Finally, after a period of time, he can re-measure his criteria to see if his business has improved.
Business within a business
A manager of a department in a large corporation wants to improve the output and reduce employee turnover.
He measures the output, turnover and how it affects the profits for his department. The company is ISO 9000 certified, so he uses the Quality Manual to help solidify his organization. He works on improving work processes and addressing worker issues to reduce costs and losses from workers leaving or making careless mistakes.
His customer base is fixed within the company, so he tries to satisfy them through better communications. Finally, after implementing these changes, he measures his department's effectiveness again to verify the improvement.
You need to know what you consider an improvement before you can start to improve on it. Then you measure it before and after, organize, reduce costs, and satisfy your customers. That is how to improve your business and become a champion in your field.
The first step to success is the longest.
Resources and references
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Steps to Improve Your Business