The world of competition is particularly severe for small businesses. This is the reason why the majority of small business fail every year despite the advice and assistance offered by the Small Business Administration. If we take a Darwinian approach to business competition, then the ability to perform tasks rapidly while expending a minimum of capital and other resources is a clear competitive advantage.
Savings, that is reductions in the costs of operations, are most beneficial when they are closely tied activities that are essential to the survival of the company. There are 4 key ways by which small businesses can achieve optimal cost savings.
Savings through Scheduling
Scheduling is often considered to be a life and death issue for large corporations involved in production of major goods such as automobile. But effective and efficient scheduling hours for staff can be as important to the survival of a small company and scheduling the arrival of coal and ore to a steel plant.
Today, small companies are using software to analyze exactly when the company benefits most effectively from the presence of each staff member. Just as large corporations benefit from just on time arrival and cut warehousing costs. So small businesses can optimize costs for cashiers and other staff members by closely analyzing the hourly ebb and flow of the demand and need for their services. Significant savings may accrue if the company can flexibly schedule the hours for which staff will actually be needed on a daily basis.
Savings through Hiring Practices
For most companies, it is absolutely essential to engage human staff. However, it is not always necessary to “hire” the staff as either full time or part time employees. Human workers often generate long-term costs. The booking costs just to track human workers can be significant. Employee benefits such as sick leaves, vacation, and retirement may constitute crippling costs especially for small businesses. The processing of Federal requirements, which include Federal programs such as Social Security, is another difficult, time-consuming cost associated with the employment of a sizable staff.
There are however alternatives to the hire of full time or part time employees. By hiring through employment agencies, companies can restructure the costs of human workers so that the employment agency rather than the company using the worker handles them. By using labor contracted through an employment agency on a regular basis significant savings may accrue.
Savings Through Appropriate Production and Distribution Technologies
Although the technology costs and potential benefits are much bigger for large corporations, effective use of appropriately scaled technology for small companies may significantly reduce the need for human labor and likewise reduce consumption of energy in production, storage, and distribution. Single board computer control chips such as open source Arduino cards attached to 3D printers are on the verge of revolutionizing production through applied robotics. The same Arduino chips attached to pilotless flying drones are on the verge of greatly reducing the costs of distributing products.
An example of how production technology maybe made both more environmentally friendly and economically efficient is when printers are designed to accept and use ink cartridges that have been remanufactured and reloaded with a fresh supply of ink.
The use of remanufactured ink cartridges comes with several environmentally friendly features. Cartridges are typically made of plastics that are petroleum based. By reusing ink cartridges we conserve petroleum, which can then be used for gasoline or heating oil. The reuse of cartridge components also saves critical space in landfills. Printing with remanufactured ink cartridges will make the whole printing process more efficient by increasing the page yield per dollar and lowering the price of the printing job. Even the quality of the print job is enhanced as technology employed by re-manufacturers matures.
Savings through Enhanced Communications and Transportation
Some small companies are more focused on providing services to clients rather than producing material goods. Such companies typically expend thousands of hours a year in driving to meetings while getting stalled in traffic jams. This frustrating loss of productive time is about to become a thing of the past with the rise of self-driving cars. These cars will transform driving time into productivity time. Enhanced by GPS and road condition sensors, automobiles are being transformed from transportation tools to rolling comfortable offices optimized for productivity. If time is money then self-driving company cars will soon be the source of significant company savings and enhance productivity.
With the rapid evolution of hiring practices and technology in production, transportation, distribution and storage, it behooves small companies to stay current and apply best practices. The savings available through effective and efficient use of resources can make the difference between a miserable failure and a successful survival.