When you are a small business, every dollar counts. One often overlooked expense is labor, especially when you first start out and are working for free. You don’t worry about how long it is taking to make that hand cream, package it and send it out. What matters to you most is that the quality is high and it looks beautiful. What matters to you most is that your customers will fall in love with your product and buy it. You aren’t terribly concerned with how long it takes to achieve that. After all, your time is free.
Wrong. Your time isn’t free. If you are making product, you aren’t spending time marketing. If you are doing paperwork, you aren’t spending time making product. You get the picture. When you are a team of one, every second of every day counts. You time is incredibly valuable. As a result, you need to be as efficient as possible. How long it takes to make that product, package it and ship it matters.
One of the best ways to become more efficient is to do a time study. A time study is where you keep track of how long it takes to do a specific task on three separate occasions and then record it. Typically, you create a spreadsheet with all of the tasks you do regularly listed, leaving three columns open to record the time it takes to do the tasks. You track your time to complete the task three different times because sometimes it takes less time to do a task and other times it takes more. Recording it three times allows you to come up with an average time for the task.
Only track the tasks you do over and over. If you only do something once, there is no point in tracking it as you won’t have another opportunity to do it more efficiently. If you want you can start with only those tasks that you do several times a week and then move to tasks that you do several times a month and finally on to those you do several times a year. This makes the process less onerous and more manageable.
Once you know how long it takes to do a task. You can begin to analyze it and look for ways to complete the task in less time. Start with the tasks that are the most time consuming and then work your way down to the ones that are smaller.
To analyze the task, look at each step. Brain storm ways to either eliminate a step or shorten the time it takes to complete it. Get creative. Here are some questions you can ask yourself as you do your analysis:
- If it is a paperwork type task, is there software that will make this task easier? Kerrii was designed for this purpose.
- Is this step really necessary? What will happen if I skip it all together?
- Is there a way to combine multiple steps into one?
- If it is a manufacturing type task, is there a way to reorganize my workspace so I take less steps?
Everything should be analyzed. All solutions should be considered, even if it is one that you don’t really like. You can always reject it later. The important thing is you are taking the time to look at things critically and closely. It is amazing the solutions that you find when you open your mind and get rid of all the rules.
Once you have done your brain storming, start to eliminate solutions. Look for things that save you time but don’t cost so much that you won’t get a return on your investment. Remember, you are doing this to save money, not just being efficient for the sake of being efficient. It is easy to get caught up in the excitement of buying new equipment to make your life easier and then forgetting about the price tag.
To determine if a piece of equipment is a wise investment. Calculate how much time it will save you each time you use it, multiply this by the standard hourly pay rate. This will give you the amount that you are saving each time you use it. Then look at the price of the equipment.
Divide the price by the amount that you save each time you use it. This will tell you how long it will take for the piece of equipment to pay for itself. After that, you will start to save money. Is that time frame acceptable to you? Are you comfortable taking years to pay off a piece of equipment? Only you can decide that.
One thing to keep in mind is that some equipment doesn’t save you time with one task but it may save you time over several tasks. Take a vacuum filter. If you are filtering only one tincture, it doesn’t save you time over using a coffee filter. It actually takes you longer as you have to clean the equipment. However, when using a coffee filter you have to take the time to pour the tincture in and squeeze it through the filter. With the vacuum filter you pour the tincture into the filter and walk away. This frees your time to press the next one. Time is saved when you filter several tinctures but not when you filter just one.
Once you have chosen your solutions and implemented them, it is important to do another time study so that you know whether or not they are actually saving you time. Don’t assume that they are. Make sure that you check. Sometimes a great solution on paper isn’t such a great one once it is implemented. If it doesn’t get you the returns you are looking for, go back to your brain storming list and pick another solution. As long as you continue to look for ways to improve, you will become more efficient and move closer and closer to having a successful business.
Article written by Bernadette Ann.