Applying Process Improvements For Small Businesses

It is no secret that small businesses in the United States play a huge role in the state of our economy. According to the Small Business Administration (SBA) Small businesses make up more than 99.7% of all employers and produce over half the nonfarm gross domestic product each year. With that said it stands to reason that the small business would significantly benefit from process improvements. In spite of the massive opportunity most small businesses are overlooked by the industry because they face unique challenges when it comes to process improvements.The dilemma small business face is a lack of resources (time and money) and specialized skills needed for most mainstream methodologies. In most cases they do not have the structure or the resources to support rigorous methodologies such as Six Sigma or Lean and most don’t have the expertise to use “simpler” methodologies such as CAP or Work-Out. But small businesses would unwise to simply stop their pursuit of implementing process improvement plans into their business strategies. You as a small business owner or manager can initiate a process improvement strategy that will assist your companies growth by simply, establishing a methodology and go after the low hanging fruit with little investment and basic business skills.The first step for a small business is to establish a methodology or system to address the needs of their business. No matter what the industry or business a consistent methodology is crucial to accomplishing goals. Although I am a certified Six Sigma Black Belt I often advise small companies to implement simple plans and simple tools address current needs. I have often used a methodology I call D.A.I.T.Discovery – Write down a list of your largest categories of expenses and charges, evaluate your margins and evaluate your cost and decide were you are compared to others.
Once you have established a financial number to each category you now have an effective project list.Attack – Select an area of opportunity and begin your attack plan. Brainstorm the constraints you face in reducing your costs or improving your margins. Get other together and brainstorm ways you can reduce or eliminate those constraints and what tasks you need to complete in order to achieve these results.Initiate – This step should be done within a couple weeks and is simply following through on your attack plan using an action item list.Track – Now is the time to sit back and see the fruit of your work. Evaluate the benefits financial or otherwise and celebrate with those who helped you achieve the results. If no results can be tracked then step back and create a new attack plan.By following these simple steps any company no matter the size can see great results by simply stepping back and “sharpening the axe” your company will be better positioned to grow and experience better profits for indefinite future.Remember that if you have never attempted to do any process improvements you should always go after the low hanging fruit first. The first few attempts for a company should be “no brainers.” This will allow you and your staff the opportunity to practice and make some mistakes and allow for the biggest improvements.Armed with the DAIT methodology small businesses can begin their experience with process improvement and move to more advanced methodologies that address customer needs with the additional resources gained from DAIT. The opportunity is substantial in both small and large businesses the impact of inefficiencies can make up 2/3rds of margins. While there are many factors that a business owner or managers can not control your efficiency and processes are completely within your control and you can be more successful using process improvements as a critical piece of your business strategy and plan.