In our previous blog posts, we addressed tips to prepare your business for the summer. Now that summer is quite suddenly coming to an end, it’s around the time of year where businesses start to ask the bigger questions – for example, “Does my business have the right infrastructure in place?”.
To answer this question, we need to first ask another:
“What does infrastructure in business mean?”
The term infrastructure in business is used in general to describe all the necessities required to run a business. These “necessities” range from facilities, to equipment and staff, to services – for example, outsourcing or contracting printing or IT needs to a different company. In layman’s terms, “infrastructure” is the combination of everything you need to make your business tick. It could also be described as everything you need to pay for! Too much or too little infrastructure can quickly result in diminishing returns – the age old economic problem. Why have 3 ovens, if you only have 1 chef? Or vice versa. Productivity won’t be at it’s highest with either of these levels of infrastructure!
How can I evaluate my business’ infrastructure?
How is it possible to tell if you have too little, or too much infrastructure? Put simply, a lack of infrastructure will make itself known to you – and by the time it does, it may just be too late. An incapability to deal with orders or service level can mean that your business takes a big hit – if not only reputation wise.
The most efficient way to evaluate your infrastructure is a combination of financial auditing and SWOT analysis. This consists of 3 main steps:
1. Define your infrastructure properly! Infrastructure falls into fiscal and people categories. Both these categories require processes, procedures and policies to be the most effective.
2. Look at your expenses, and arrive at your true total cost. Keep an eye out for things that may usually be ignored. It might sound like a silly example, but is one department spending an inordinate amount of money on staples, and not properly accounting for the expenditure? Multiply a small thing like this among all your departments, and the figure starts to add up! Basically put – do not leave anything out!
3. Finally, this information will allow you to ask yourself – “How are we doing?”. This is where SWOT (strengths, weaknesses, opportunities and threats) analysis comes in. Evaluating your threats and grabbing opportunities is critical to your own success.
Questions to Ask Yourself
1. Are you paying the right taxes? Are you paying enough? Will you end the financial year owing a lot of money or is everything up to scratch?
2. Do your accounts reflect how you do business? Are you following good accounting principles? Having many different accounts in different places means that streamlining the process of evaluating your business’ infrastructure will be very difficult.
3. Is turnover high? Are you and others carrying too big a workload? Whilst many of us follow the mentality of “just getting on with it” as a way of appearing successful, the fact is that too much work will eventually damage your business, due to the stress it inevitably causes.
Answering these questions will allow you to see where your infrastructure needs to change. Is one department under a huge amount of stress, or lacking resources? Hiring an extra employee or purchasing additional equipment is likely to skyrocket productivity and turnover. Your evaluation allowed you see this!
Look before you leap! Business decisions should always be made carefully. Make your evaluation, and then examine the relationships between all parts of your business. Really understand how one change may have a knock on effect to a different area. Taking a step back before acting will help you make the right choices regarding your business’ infrastructure.
So, what does infrastructure mean in business? Now you know! Get out there and make the rest of 2019 the most successful it can be. If you feel like you don’t have the tools you need to act now, we are on hand to help.