What is it, Types, and How to Improve It
Improve more Efficient Business, The level of business efficiency is an important benchmark in the development of a company. If the business does not run efficiently, this risks making the company lose revenue.
Therefore, you must know the steps to help the company run more efficiently. Well, in this article, we will provide a complete explanation of business efficiency. Come on, see the article!
Understanding Business Efficiency
According to Tony Robbins, business efficiency is the company’s ability to maximize its output based on its time, money, and resources.
In other words, business efficiency measures how well a company can manage its raw materials, labor, and capital into services or products to generate revenue.
One of the goals of business efficiency is to reduce business costs while maximizing output. This is done so that the company’s profit margin increases.
Types of Business Efficiency
4 Asian people are having a meeting to improve the efficiency of the company’s business Then, how can you know that a company is running efficiently? Well, according to Indeed, here are some benchmarks for measuring business efficiency.
1. Return on investment
Investments are expenses that are incurred today to help companies save or earn money in the future. An investment will eliminate the company’s current business efficiency. However, the return on investment will increase the company’s business efficiency in the future.
2. Process efficiency
Process efficiency measures and ensures a workflow in the business runs effectively and efficiently. This can be done to find ways to increase the cost-to-income ratio.
For example, you can research the process of product delivery in terms of cost and speed to reach consumers or clients. So, if the company can deliver products quickly and with only minimal cost, it can be said that its business efficiency has been achieved.
3. Operational efficiency
Operational activities are a collection of processes that are contained in the company’s overall business model. In general, operational activities take up a lot of the company’s business costs.
Thus, often the focus of business efficiency efforts is on the operational aspects of the company. The better the operational efficiency of the company, the overall business efficiency also increases.
4. Eco-efficiency
You must calculate the impact of a company’s business activities on the environment when analyzing the eco-efficiency of a business. For example, you can calculate environmental costs as a percentage of a company’s revenue.
5. Energy efficiency
You can also judge whether a business is running efficiently based on the amount of energy used for all its activities.
This is because an energy-efficient company will spend less. Of course, this is a form of business efficiency.
6. Labor productivity
Another way to determine business efficiency is to measure the level of labor productivity. You can judge this by figuring out how many tasks or items the workers can produce in one hour. However, this type of efficiency is highly dependent on the equipment and technology used by the workers.
7. Financial efficiency
The financial efficiency of a company can be measured by determining what percentage of revenue is used for business expenses.
How to Improve Business Efficiency
According to Square Up, here are ways to improve business efficiency.
1. Using technology
One way to improve business efficiency is to use technology, especially for monotonous tasks and processes.
Technology helps everyone be more productive by helping them focus on other jobs that require a more human touch. For example, you can use technology to send email marketing automatically.
This technology certainly helps the marketing team to focus more on other things such as writing personalized emails for consumers. Although using technology for various processes costs a lot at the beginning, you will get a large return on investment.
This is because you can increase business efficiency by cutting costs that need to be incurred in the future.
2. Open communication
Ensuring open communication between individuals is another way to increase business efficiency. This is because open communication helps everyone to generate and convey ideas, solutions, and suggestions easily.
Of course, it helps companies to make better decisions. With better decisions, of course, the company’s business efficiency will also increase.
3. Face-to-face communication
Ensuring open communication enables the company’s business efficiency to increase. In addition to open communication, face-to-face communication can also increase business efficiency.
Face-to-face communication is very important, especially if you need clarification, ask questions, or find a solution to a problem. Not only that, but face-to-face communication will also be easier to solve a problem than via email.
If your company sets WFH or WFA, you can also use virtual meeting applications such as Zoom or Google Meet for face-to-face communication.
4. Limit interruptions
One form of interruption is an impromptu meeting. Because those involved in the meeting must spend time outside of their main job at that time. So, try to schedule several meetings on one particular day instead of spreading them throughout the week.
5. Hold a brief meeting
Several meetings involving all departments are indeed important. However, sometimes the meeting will take a long time. So that everyone will be short of time to do his work.
So, it would be better if you hold a short meeting, say for 10 minutes in the morning, if you have something to say.
6. Avoid multitasking
One other way to increase business efficiency is to avoid multitasking. So, encourage your team to complete tasks one by one.
In addition, not multitasking will also reduce the risk of a project being late.
Well, those are some things you need to know about business efficiency. In essence, an efficiently running business allows the company to get maximum profit.
Of course, business efficiency is only one of many important factors that help the development of the company.
Well, you can get it all by reading the various articles that 20info.com has prepared.