Money is flying away due to an inflation bubble and the employees trying to stop it. (clipping used … [+]
It's no exaggeration to say that small businesses have been riding rough waters in 2020 and beyond due to their incredible resilience. From the pandemic to significant supply chain disruptions to a dramatic rise in inflation, small businesses have navigated with precision and ingenuity, drawing praise for their efforts. Survival.
With labor shortages and high prices, running as lean as possible is not only a good idea for small businesses, but a necessity. Small businesses often operate on razor-thin profit margins, so it's important to learn how to create large buffers in your cash flow.
By applying lean management principles, small business owners can create more value for their customers with fewer resources.
We'll focus on three Lean principles to implement first.
Definition of value
The value of everything on the market depends on consumer demand. How much money are consumers willing to spend on your product or service? When the economy gets tight and dramatic changes occur in other areas of consumers' lives, first principles of economics kick in. People make trade-offs. When things get tough for consumers, they start taking a hard look at what they spend their money on and whether it's still worth it. problem? It's very likely that your product or service is something consumers will cut out of their spending budget.
As a small business owner, part of your job is to predict how consumers will react to changes in the economy. To determine whether your product or service is here to stay, you need to take a scalpel to your business and ask yourself questions such as: “Are our customers getting what they need?” Are we delivering on our promises in a timely manner? Have our customer buying habits changed for the products and services we offer? Are there other products or service types you can add to make your product more valuable?
86% of customers say great customer service transformed them from one-time shoppers to lifelong brand champions. In times of economic downturn, nothing is more critical than having consumers who are advocates for your brand. they will be loyal.
value stream mapping
Although this type of mapping is primarily used in manufacturing operations, its principles work when visualizing how all parts of an operation work together. Visualizing how you deliver your product or service can help remove bottlenecks and tension points.
You don't have to spend 1,000 hours on VSM. Plan how your business will deliver your product or service from start to finish and include the roles of your employees. Build simple visuals of your current state, ideal state, and future state to understand how you're delivering value today, what your perfect delivery system would look like, and everything in place. We want to help you understand what future operations will look like. Components work smoothly.
Creating a workflow
Now that you have mapped out how everything is working, how you want it to work, and what the future of your business will be, you can work on specific workflows that move from one process to another.
This is important because business inefficiency is costly. It is estimated that 20% to 30% of revenue losses in business operations are due to inefficiency each year.
When money is tight for consumers, you can't afford not to deliver on your promises, and you can't afford to take a loss because your business operations need to function properly.
Whenever the economy is unstable, it helps to have a plan in place to ensure your business is running as a revenue-generating machine that continues to deliver value to your customers.
