Business automation 101: What is Automation and How Does it Work?

The topic of automation is hard to avoid — no matter your industry, discussion of automation has likely crossed your radar. From machines taking on human tasks to intelligent automation running entire businesses, futuristic ideas about automation are popular and often misunderstood.
The truth about automation is that it’s far less complex (and usually has nothing to do with machines or robots). Businesses of any size can leverage automation to save money, free up time, and grow, and many businesses are already using automation tools every day, some without realizing it.
Here’s what businesses need to know about automation, including how business automation works, its many benefits, and how it can be leveraged in all business types.

What is business automation?

Put simply, business automation is the process of using tools to automate everyday, repetitive tasks. Whether that means automating staff scheduling or setting up automated marketing campaigns, business automation tools can be used across a wide range of functions to help save time, create more efficient workflows, and make employees’ jobs easier.

The 2023 Square Future of Commerce report found that, in North America, 38% of restaurateurs plan to automate operations to maximize staff efficiencies, especially as hiring is a challenge and consumer expectations continue to rise. On the consumer side, 73% reported that they’d prefer automation over live staff members in at least one area of a business, particularly for operational aspects, like finding product information, ordering or checkout, or arranging for pickup and delivery.

What business automation is not

A common misconception of business automation is that it means eliminating staff or losing a customer-centric approach. However, automation tools actually help do the opposite: Automation helps free up staff from spending their time on mundane, repetitive tasks so they can focus on more engaging or growth-focused areas of the business, like marketing, customer service, or expansion.

Business owners who’ve considered automation agree: Square Future of Commerce data found that a full 99% of restaurateurs whose businesses drive $1 million or more in revenue per year said that automating back-of-house operations would allow staff to focus on more important parts of the business.

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Common uses and examples of business automation

The use of automation tools in business is a lot more common than often realized. Some businesses have already automated aspects of their operations — whether they think of it as automation or not — and others are manually completing tasks they could easily be automating instead.

Here are some examples of the most common use cases of automation in business:

  • Inventory management: Inventory and order management is a top challenge for many businesses, especially as businesses begin to diversify their offerings and sell across multiple channels. Automating inventory tracking and order management for all products across sales channels reduces room for error and frees up considerable time.

  • Marketing: Most businesses want to increase their marketing capabilities, but operational tasks often take priority. Automating certain marketing efforts — like customer loyalty programs — can help increase the amount of marketing that runs in the background and keep customers engaged without a big effort from staff.

  • Customer relations: Analyzing customer information is crucial for marketing and business decisions, so automating the customer relationship management process helps ensure you don’t miss any data from your sales. Automating other aspects of your customer interactions, like reservations and pre-ordering, saves time and allows customers to interact with your business more efficiently and on their schedule.

  • Team management: Automating staff management tools is advantageous no matter the size of your team, but is especially important as a business grows. Having systems that automate shift scheduling and tip poolingimproves your workflow and makes onboarding new team members easier to do.

  • Finances: Whether you have a dedicated team member responsible for bookkeeping or you’re managing finances yourself, automating certain reports — such as sales summaries, sales trends, and expense reports — or setting up monthly automated reminders and invoices can greatly simplify the billing and bookkeeping process and eliminate the need to manually reach out to customers for payment.

  • Personalization: Customizing the shopping and ordering experience for customers has become even more crucial as consumers shop on social and mobile platforms catered to personalization. Taking advantage of automated eCommerce features — like showcasing new products or sales, offering recommendations based on previous purchases, or even autosaving customer information for a quick online checkout — can provide a personalized experience for customers that doesn’t require additional staff time.

Benefits of business automation

The biggest benefits of incorporating automation tools into your business is efficiency and time-savings. Hours spent on manual tasks, like inventory tracking, can be dedicated instead to growth and innovation, increasing productivity and output from your team.

Besides saving time, here are some of the benefits of business automation:
Staff retention: Automating repetitive tasks can free up your staff to dedicate their time to more productive and important areas of the business, like marketing, customer service, or growth planning. More engaging work often leads to better staff retention.

  • Customer satisfaction: Customers want to interact with your business in a way that best suits them, and Square data indicates that the majority of customers want automation in some areas of the businesses they frequent. Using automation tools that streamline processes and create more efficiency in the customer-facing aspects of your business can help improve customer experiences overall.

  • Growth: Removing repetitive manual tasks from the daily workload of business owners and staff means time and attention can be focused elsewhere, often on growth initiatives. Whether that’s growing your customer base or expanding to a new location, automation tools can help run aspects of your business in the background so you can scale.

  • Future-proofing your business: Automation tools on their own are relatively simple to use and usually address one area of your business. But as you grow and automate more tasks, the automated aspects of your business should work together in an ecosystem to grow with you. It’s smart to select software and tools that work together to power your entire business in any direction you decide to take it.

How to leverage automation in your business

The first step to leveraging automation tools in your business is considering the tasks or areas that would most benefit from automating. What takes the most time out of your day or your staff’s day? What causes the biggest headache or has led to avoidable errors? It’s possible that it’s an area that can be automated entirely, or perhaps there are individual components within the task that could be automated as a start.

As a next step, consider what successful business automation would look like for you. ROI, cost savings, revenue growth, or even more satisfied customers may be your ideal outcome from automation tools, but it’s helpful to assess the areas where automation would be most impactful in your business and help your bottom line.

When you’re ready to explore automation tools in action, learn more about the easiest ways to start embracing automation at your business.