We’ve all heard the phrase, “It takes money to make money.” While the sentiment is true, this old adage leaves business owners desperately seeking more detailed information.
How much money does it take to make money? And how can you tell if you’re spending too much or too little to achieve your goal of making money?
Finding the answers to these questions takes a lot of research and, unfortunately, some costly trial and error. Make too many errors, and you could find yourself with serious cash flow problems that put you in need of the factoring, asset-based lending, and receivables financing services were offer here at The Commercial Finance Group in Atlanta.
We’d much rather use our asset-based lending services to help businesses grow, not bail them out of hot water (although we can do that too). So one of our first questions for a business seeking financing is: How much are your operating procedures costing you?
If you’re not sure how to answer that question, keep reading. This article will help you learn more about the impact of operating procedures on your cash flow and how to evaluate them for potential waste.
What Are Operating Procedures?
At their most basic, operating procedures describe how each task in your business will be carried out. Comprehensive operating procedures are an important part of your business plan as well as your training processes. Operating procedures can be created for tasks like cleaning equipment, closing a retail location for the night, and how to intervene on a client who wants to cancel their service account.
Why Operating Procedures Need To Be Evaluated
Every single task that takes place during the day-to-day operation of your company costs money. From the employees taking care of various aspects of your business to the person who maintains the building. They’re all getting paid for their time, so it’s important to do what you can to ensure that they’re time is being spent wisely.
How To Evaluate Your Operating Procedures
Operating procedures obviously vary widely from industry to industry. However, the three procedures we’ve listed below are fairly universal no matter what kind of business you’re running.
- Communication – Whether you have two employees or 200, it’s absolutely necessary that communication between them is clear and consistent. From time to time, employees at all levels of your organization should be polled about communication quality, where breakdowns are occurring, and what could be done to improve things.
- Physical Space – You probably didn’t think about costs when you were setting up your office space, but floor plans and office layouts can play a big role in how efficiently your business operates. Take some time to evaluate the floor plan of your facility. Does it encourage efficient movements and employee safety, or is it slowing processes down? It can be helpful to enlist the services of an outside consultant in business management strategy for a thorough evaluation.
- Equipment – Today’s businesses live and die by the level of technology they utilize both at the office and in the field. Are you turning down potential revenue because your computers are old, your employees don’t have smartphones, or you can’t accept credit cards out in the field? Anything you can do to move toward paperless operations can free up time and revenue.
Contact The Commercial Finance Group For Asset-Based Lending
We hope this article has been helpful in illuminating some of the places where money could be falling through the cracks in your business. Remember, whether you’re having cash flow problems due to inefficient operating procedures or simply need to increase working capital so your procedures can be improved, CFG is here for you. Our asset-based lending and other financial services are at your disposal. Contact us to start the process today.
