What is your Productivity Plan? 

Over the years, I’ve had some inspiring, brilliantly satirical quotes tacked to my office walls. This was one of my favorites as like all entrepreneurs I was facing that intimate relationship with the end of the month with payroll and a stack of other expenses to be paid before I could take anything home myself.

“All you have to do to run a successful business is to sell something for more than it costs you to produce it. (That and a million other small details, but who’s counting.)”  – Author unknown

It always made me smile to read it, and sometimes to just laugh right out loud.

In the 80’s, I was privileged to have an audience with Richard J. Needham,  the prolific H.L. Menchen-like opinion columnist whose quips and quotes I turned to daily in the Globe and Mail. We met in his tiny cubbyhole of an office, a rather colorful scene with overflowing ashtrays, a smoky haze in the air, untidy stacks of books, newspapers and magazines, an overfull waste basket, and scraps of paper, cigarette packs and notepads scattered over every flat surface. But he could lay his hands on any specific item in a minute.

He was grumbling about unions pushing for a 40-hour work week. He figured you weren’t even breaking a sweat in under a 60-hour week. Most business owners could identify with that, especially in the early years of their venture.

And he did make one very important point albeit implicitly. Work and its compensation should not be just about hours or even hourly rates for that matter, but about Productivity. Productivity is what creates results, not putting in time.  Productivity is what gives employees a sense of personal gratification. Productivity is what a business needs to keep its doors open. And yes, it has to sell something for more than it costs to produce and at a price that customers are willing to pay for it. And as always, the buck stops with you, the owner.

How to Improve the Productivity of Your Business

Develop an effective productivity measurement system so you can spot areas for improvement in your business and do something about them. Making a 1 or 2% change for the better, will make a positive difference to your bottom line.

Ask yourself what information you will need, to make better business decisions, to understand where you are most highly profitable, and where you are leaking cash. What processes are working efficiently and what changes will you have to make to improve?  For example, do you have a formula for applying your overhead costs to the specific products and services you deliver? Or even a set of gross margin and expense ratios applied to each of your products and services? 

Know your numbers.  Measure where you are now, set goals for where you want to be, and track your progress as you go along. Your accountant and bookkeeper can help you set up your financial reports to produce what you need, and a talented spreadsheet developer can fill in the blanks with data not directly recorded in your accounting system.

Enjoy the feeling of moving forward, and share your new-found strategies with other business owners, too. Individually, and together, we can prosper, while helping our communities do the same.

*This article, with minor edits, first appeared in my Entrepreneurial Adventure column in the Penticton Herald on March 5, 2020. 

© 2020 Mary Lou Gutscher, Success Mentor