The modern business world is a very competitive place, and any business which is not efficient will eventually fail. Efficiency is important for all businesses, but it is especially important for small businesses because these have fewer resources. A large company may continue for a number of years even if it is inefficient, but a small company will fail more quickly. Inefficiency can cost businesses 20 to 30 percent of their revenue which isn’t sustainable for a small business.

Inefficiency in the workplace can be caused by a number of factors. A poor IT system which is slow or often down will reduce the efficiency of the workforce. Upgrading the IT system to make it more robust and responsive will improve productivity. Allowing employees to work from home can also save money for small businesses. For a small business, it may be more cost-effective to employ a cloud-based service rather than purchase new servers.

Outdated equipment which frequently breaks down wastes time and may result in work having to be redone which also wastes materials. Keeping equipment up-to-date will mean that the business runs more efficiently and is worth the expenditure.

Poor management and processes can also result in inefficiency. If employees are uncertain as to what they should be doing or what processes to follow, it may result in time being wasted and poor quality products being delivered to the customer. Poor quality will impact a business’s reputation. Establishing proper processes and ensuring that employees are well trained and managed will mean that the business will run more smoothly.

Employees are important to all companies, but especially small businesses which have fewer employees. Small businesses may rely much more on key personnel to keep the business running well. Anything which effects an employee’s performance will negatively impact on a business’s efficiency.

Ideally, employees should leave their personal problems at home and concentrate on their work while they are in the workplace, but sometimes this is hard to do. Problems at home may result in employees feeling depressed or stressed and this will result in reduced productivity. Employers can help by providing counselling services at work, but sometimes it will be necessary to permit employees to have some time off to deal with the issues.

In recent years, employers have become more aware of the problems of substance abuse in the workplace. Employees may abuse a number of substances including alcohol, illegal drugs and prescription drugs. This can have serious consequences for a business. Firstly, a business which has illegal substances on its premises could be subject to prosecution. Employees who are abusing drugs may be a danger not only to themselves but also to their colleagues and members of the public. They may bring the business into disrepute by their behaviour, especially if they interact with the public. This has led some businesses to introduce drug testing such as an oral fluid lab test. Such tests can be conducted by an external testing service.

All businesses need to be profitable, and in small companies, efficiency is crucial. A big part of efficiency is ensuring that employees are operating at their full potential. Efficiency and profitability involves a careful look at employees and people.