Operations management is the nuts and bolts of running a business. Getting your operations, systems and procedures right across every element — from staffing to technology and more — helps you run your business more efficiently and sets you up to scale with success.
What is operations management?
Operations management is about planning, implementing and controlling the production of your business’s goods and services. It’s about ensuring that your business is being run in the most efficient way possible and that means keeping expenditures down while maintaining a great customer experience. An efficient and streamlined process allows you to maximise your profits and gives you the structure and confidence you need to grow.
What’s included in operations management?
The heart of operations management is all about transforming what you’re putting into your business (such as labour, capital, equipment or buildings, for example) and adding value to provide outputs (goods and services) for your customers or clients.
Good operations management will see you making strategic decisions based on reliable data in order to maximise your sales. It requires a complex understanding of all aspects of your business, so that you can make informed decisions to capitalise on opportunities and minimise potential risks.
Effective staffing is about keeping your wage expenditures low while making sure you always have enough employees during the busy periods, to help maintain a high level of customer service.
If you’re running a retail business, for example, you might want to analyse your data on traffic flow and the breakdown of sales patterns. Identify your peak and low periods and build your roster accordingly.
Settling on a location can be one of the most significant financial decisions you have to make for your business. For instance, do you need a shopfront or office, or can you run your business from home?
If the right location is integral to your viability, you should build a strong understanding of the local area and market where you plan to operate. Market analysis can help in this regard: Who are your competitors? Is there a demand for the goods or service you’ll be selling? Is it a product or service people travel for or will you be mostly serving locals? The answers to these questions should guide your decision.
Equipment and technology
Reliable business technology and software should maximise the customer experience, while also giving you scope to grow your business.
Square Point of Sale is designed to get your staff up and running quickly. Powerful enough for every business, this handy POS has every tool you need to run a business effectively. It allows you to accept payments, send digital receipts directly to your customers’ inboxes, manage your inventory and build powerful reports that help you analyse your business and plan for growth.
Accepting payments with a mobile card reader is the fastest, most convenient way to ensure you’re getting paid for your valuable time. Square has two options available — Square Reader for chip cards (enabling you to accept chip and magstripe cards) and the new Square Reader for contactless and chip (enabling you to accept tap-and-go cards, mobile wallets and chip cards). Both readers are small enough to fit in your pocket, can be charged conveniently with the included micro USB adapter, and have no recurring monthly fees or lock-in contracts. You can feel safe knowing that you’re only charged a fee when you accept a payment.
Analysing your operations
Keeping a close eye on your operations through assessing and analysing your performance helps ensure you’re running as efficiently as possible. You should be constantly asking these important questions:
- What’s your margin?
- Where can you make savings?
- Where are the opportunities for growth?
- Do you frequently run out of product?
- Can you renegotiate contracts with suppliers?
- Do you have enough help during peak periods?
You can find answers to many of these questions using Square Analytics. It’s an invaluable tool that allows you to see what’s selling well, track what’s still in stock and take a look at your bottom line at a glance. It also helps you better understand metrics about your customers, such as how much they spend and how frequently they return. You can also integrate bookkeeping and accounting platforms like Xero and QuickBooks Online into your Square Dashboard to help keep your finances in order and available at your fingertips.
This is part one of our Business Plan series. Part two is about cash flow statements and analysis.