Business Efficiency | 3 mins read

5 Ways to Instantly Increase Business Efficiency

5 ways to instantly increase business efficiency
Chloe Henderson

By Chloe Henderson

Increasing business efficiency may seem like a broad task, but oftentimes, it depends on making small, impactful alterations to processes. Just by making slight changes within a system, organizations can experience significant improvements to productivity.

Business process improvement can only be achieved once bottlenecks within operations are defined and assessed. Therefore, companies must first be able to identify their various core processes and ways to improve efficiency.

What is Business Efficiency?

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Business efficiency refers to the implementation of strategies and tools that allow organizations to perform standard processes and produce quality outputs with minimal invested resources.

Companies that can reduce the time, capital, and effort needed to complete a task successfully can increase productivity, functionality, and profits. This allows organizations to expand their business, remain competitive, and provide the best service to their customers.

The most common types of business efficiency include-

  • Financial Efficiency is measured by finding a company's expense versus revenue ratio to calculate profitability.
  • Labor Productivity refers to employee output level in a set timeframe, whether hourly or daily. Labor productivity can be optimized with software tools, automation, and other advanced technologies that simplify standard procedures.
  • Energy Efficiency is the amount of energy needed to operate a business and produce goods.
  • Eco-Efficiency calculates the total environmental impact a company has when operating routine processes.
  • Operational Efficiency refers to the cost of essential operations, such as delivery and production, and how it affects profits.
  • Process Efficiency is the measurement of workflow expenses, such as the time and cost required to count and replenish stock.
  • Return on Investment (ROI) refers to the capital returned to a company from an investment through additional revenue or improved efficiency and productivity.

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5 Tips to Improve Business Efficiency

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In order to improve business efficiency, companies should be able to identify what exactly is lagging their processes. Often, scheduled audits show slow digressions that may seem menial but incrementally build up over time. So, what was once a minor inefficiency may become a significant drain on the company's profits.

Therefore, management should monitor operations for inefficiencies, large or small, and make alterations to prevent further discrepancies from forming. Standard practices organizations can use to improve efficiency include-

1. Monitor Employee Productivity
Employee focus directly impacts operation productivity and efficiency levels, as manual labor can be easily affected by internal and external distractions. Therefore, management teams should take the time to review the department's human resource records to search for indications of employee conflict. Even a minor altercation between two employees can create an uncomfortable work environment, leading to a loss of productivity. Typically, these issues can be resolved with a simple sit-down, where all involved parties can express their concerns.

Sometimes low productivity is due to individual employee work ethic. Managers should track each worker's output, whether through key performance indicators (KPIs) or scheduled check-ins, to determine performance levels.

Low production may be the result of personal issues, confusion, or bad work ethic. Regardless of the cause, managers should take the time to discuss with these workers one-on-one to pinpoint what exactly is holding them back. Once the inhibitor is defined, further training, position transferal, or personalized KPIs may be required.

2. Utilize Internet Tools
Through internet tools such as social media platforms, businesses can monitor customer's perceptions of their organizations at no additional cost. Regardless of whether it's a small business or large enterprise, customers are likely to leave public online reviews. This feedback can be used to improve customer service, production quality, and item rebranding to increase consumer satisfaction and loyalty.

Social media is also a great marketing tool, allowing businesses to post pictures, advertise new items, run promotions, and interact with customers for free. While these platforms should not be a company's only marketing front, they are excellent resources for having producer-consumer conversations, unlike traditional campaigns.

Therefore, businesses should consider designating an employee to actively monitor and respond to online reviews and concerns, focusing on maintaining the company's reputation and building personal consumer relationships.

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3. Outsource Wisely
While some businesses refuse to hire outside help, there are organizations that tend to outsource too frequently. It is vital to find a healthy balance that improves overall business efficiency without overtaking core processes.

For example, countless organizations specialize in accounting and payroll services and understand how to streamline clerical operations at a low cost. This allows the company to focus on more demanding tasks that generate revenue, boosting productivity and profitability. In this case, outsourcing would improve efficiency while saving the business time, effort, and capital.

4. Automate Processes
Some businesses are skeptical about implementing automated software and tools due to the misconception that automation completely replaces employees. However, this advanced technology aims to increase business efficiency and employee productivity.

By automating basic procedures, software allows workers to invest their time and skills in more complex tasks. Without the need for manual inputs, businesses minimize the risk of human error, which can create discrepancies requiring unnecessary expenses to reconcile damages. Therefore, automating processes can significantly increase efficiency by ensuring that operations are performed promptly and accurately.

5. Streamline Communication
Another significant element of inefficiency within a business is miscommunication or the complete lack of data sharing. While many companies use internal e-mail to enhance communication, complex tasks may take too long to write out.

With an integration system, departments can have access to real-time information from disparate systems within one interface. This allows project management teams to easily check on staff members' activity to ensure that everyone is maintaining productivity and working on their designated tasks. Without adequate communication, different employees could be duplicating tasks unknowingly, wasting company resources and time.


When organizations can improve business efficiency through various tools and maintenance methods, employees and internal processes experience smooth workflow. Efficient operations ensure companies can minimize system inputs and optimize outputs to promote productivity and scalability.

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