7 Tips for Lean Business Growth in a World of Excess26th March 2019
Lean Startup is a popular methodology of business growth and development that entrepreneur Eric Ries and other innovators have written about rather extensively over the years. It’s a method that aims to shorten the product development cycle and quickly determine if a business model is viable or not. But, perhaps most importantly, it introduces a number of cost-effective principles that business owners can use to save money and promote organizational efficiency at every stage of development.
While you may not have started your business with the lean startup method in mind, there are plenty of practical steps you can take towards transforming your business into a lean organization that prioritizes smart financial behaviors both now and in the future. In this article, we’ll discuss exactly how you can make this happen.
What is a Lean Business?
The lean startup method is well documented. You can find out everything you need to know about it by reading Eric Ries’ book or any number of blog posts on the topic. But for this discussion, we’re assuming that you already have an established business in place – i.e. you aren’t starting anything. Instead, you’re running an existing business in the hopes of transforming it into a leaner version.
The word “lean” is highly subjective. Different business owners use unique metrics to quantify what it is. But for the most part, it’s used to describe a company that’s able to consistently meet changing customer demands with high-quality products that require low overhead, produce high profitability, and allow for seamless scalability.
For your business to be considered lean, you must trim away the fat, eliminate the unnecessary, and focus on the few core tasks and responsibilities that truly matter. In doing so, you can keep customers happy while simultaneously setting your business up for years of promising growth and stability.
7 Tips for Lean business Growth in a World of Excess
The better you’re able to lower expenses and avoid excessive financial behaviors, the more likely it is that you’ll stay lean. Having said that, here are some helpful tips and principles to think about as you move forward.
Try It Before You Outsource It
Conventional lean startup wisdom tells you to outsource as many tasks as you possibly can so that you can focus your internal resources on the core responsibilities that matter most. But when it comes to constructing a successful business that’s built to last, this may not be the best approach.
Outsourcing will help you grow faster, but not always leaner. When outsourcing a particular task to someone else, you can easily make expensive mistakes that destroy your budget. You also miss out on the opportunity to learn how to do the task on your own. This can lead to inaccurate expectations and a dependence on outside forces to keep your business growing.
Outsourcing isn’t bad, but it would behoove you to try something before offloading it. This way you at least have an idea of what you’re getting into.
Automate What You Can
Don’t confuse the ideas of outsourcing and automating. Lean businesses should automate as much as they possibly can – with careful oversight, of course.
With automated tools in hand, you’re able to streamline the mundane, time-consuming tasks that require a bunch of man-hours. Yet, at the same time, you technically keep the tasks in house. You choose what you automate, when you automate, and how much you automate. It’s a controlled way of approaching the arduous tasks your business has to tackle regularly.
The best opportunities for automation include sales processes, email management, calendar management, and client onboarding.
Prioritize Culture Over Perks
If you take a look at the trendy tech startups over in Silicon Valley, you’d think they’re running adult playgrounds, not professional ventures. They offer perks ranging from office nap pods and free catered meals to fully stocked bars and music recording studios. If lean growth truly is your pursuit, you can’t get caught up in all this hype
The reality is that most employees don’t really care that much about having a place to nap or getting to drink a beer on company time. It sounds good in a job description, but these are tiny, inconsequential perks that ultimately cost the organization a hefty chunky of change to keep up.
Instead of offering a bunch of glamorous perks, invest your energy in developing a magnetic and warm company culture that people are drawn to.
When an employee is weighing the option of taking another job or staying put, they’re not thinking about trendy perks. Instead, they’re considering the intangibles that make the job – i.e. the supportive community, job flexibility, and opportunity to do meaningful work. If you can create a strong company culture, you’ll find it far more cost-effective to attract and retain top talent.
Be Ready and Able to Move Fast
Lean businesses are nimble. They understand how important it is to move quickly when an opportunity presents itself. As such, these organizations put themselves in a position to make things happen.
Though lean businesses should aim to keep debt low, there’s a moment and place for taking on a loan to execute promptly.
Quick cash loans from online lenders are the way to go. When you have a specific lender bookmarked in your browser, you can log on, apply for a loan, and get a few thousand dollars within a single business day. This makes it easy to pounce on an opportunity when time is of the essence. And as long as you pay it back according to the terms, you’re no worse off for taking on a small amount of debt.
Cut Overhead Costs (And Reallocate)
The classic mark of a lean business is the ability to maintain smooth operations with low overhead costs. Every dollar you’re able to save in overhead is another dollar you can use to grow your business. Start by looking for the low hanging fruit, such as:
- Utilities like heating, air conditioning, electricity, and water are all non-negotiable expenses. But a few small changes in how you use your utilities could save you significant money each month. Consider using a programmable thermostat and powering down computers, printers, and copiers at the end of each workday.
- We finally operate in a business world where it’s feasible to go paperless. By reducing your dependence on paper, you’ll save thousands per year (and get to use “green” as part of your branding).
- Square footage. Does every employee really need their own office? Do you actually need three conference rooms? Rethink your square footage needs and consider moving into a smaller space with more purposeful design. Cha-ching! That’s the sound of you slashing your rent in half.
The deeper you dig, the more you’ll find additional opportunities for slashing overhead costs. For example, most businesses are spending way too much on payment processing fees. By cutting out the middlemen, negotiating with processors, and properly setting up a merchant account and terminal, you can save thousands every year.
Invest in Organic Marketing
There’s no limit to how much advertising you can do. If you wanted to, you could spend 100 percent of your monthly budget on advertising and still feel like you aren’t doing enough.
Instead of throwing a bunch of money at advertising – which only produces results as long as you keep spending – invest that money into organic marketing that yields sustainable results.
Content marketing, for example, is almost always a better long-term investment than pay-per-click (PPC) advertising. Long after you stop paying for content, it still provides a boost in terms of SEO, traffic, and lead generation.
Running a lean business is often very challenging. There will be times when you have to get really creative in order to gain any traction. Don’t be afraid to try things like:
- You might not always be in a position where you can afford to purchase a certain product or service for your business. In these situations, consider whether you can barter with the other company? (For example, an accountant could offer a marketing company free bookkeeping services in return for access to its marketing software.)
- Four-day weeks. Have you considered what it would look like to have your team work four 10-hour days, as opposed to five 8-hour days? Shutting down your office for an extra day each week could save you a ton in overhead costs.
- Do you have something to offer college students who are looking for valuable work experience? Free and low-pay internships are mutually beneficial.
You may try some of these suggestions and find out they don’t work. Or you may give something else a shot and determine that it’s a better fit for your business. Whatever the case may be, you need to try creative options to see what’s effective.
Establishing a Strong Foundation
You don’t go from running a “normal” business that’s overleveraged, indulgent, and strapped for cash to a financially disciplined company in a matter of months. It takes years of purposeful planning and strategic execution to develop a lean company. However, you can give your business a head start by intentionally establishing the right foundational building blocks today.
Whenever you make a business decision, think about through the following filters: (1) Does it make sense five years from now? (2) Will it enable or prevent financial flexibility in other areas? (3) Does it satisfy the customer and improve the bottom line?
An inquisitive business leader is a purposeful business leader. Aim for lean business operations and always keep future growth and flexibility in the back of your mind.
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