How to boost your capacity
Speed up production or improve your systems and processes to build capacity.
Capacity building is about working on your company's ability to do more internally – such as speeding up production or improving your systems and processes.
For example, a chair manufacturer may be able to produce 1,000 chairs each month. However, due to delays because of equipment maintenance and workers being away from work, only about 700 chairs can actually be produced per month. Over the long run, they can increase their capacity and output by working smarter before you buy more equipment and hire more workers.
If you can increase output, invoicing or sales without needing to buy in new resources immediately, it sets you up for future growth.
Here are some key tips to improving capacity in your business:
We all learn by experience in our businesses, but you can speed this up by tapping into the expertise of others. You’re probably already aware of the biggest areas where you need to boost your knowledge. For many small business owners, that area is often the financial side of the business. Could you find a mentor or experienced business person who is willing to catch up with you for a couple of hours each month?
Is your business running as smoothly as it could be? Ironing out small inefficiencies can add up to big gains.
Here are some common ways to increase performance:
Small business owners complete a variety of daily tasks and can be notorious for being unsystematic. If that’s the case in your business, it can take a lot of time to show someone how to work with you because none of it is documented. If each important or daily process in your business is documented any new employees could start being productive for you on their very first day.
Having the right employees on your side is critical for the growth of your business. If things are only just ticking along, it’s worth considering how your business will fare if you suddenly entered a growth phase.
Start by auditing your needs and then identify which vital skills are missing. This will form the basis of new job descriptions.
You should ask yourself:
Identify third party contractors or other companies that could take up extra slack to increase your capacity at any time.
Having a number of other people or businesses that you can contract parts of what you do can ease temporary capacity issues, before you decide to employ full timers.
Do you have spare capital that could be better employed in the business? Many businesses build up cash reserves and there’s little point having it sitting there doing nothing. Could you redirect that capital to improve improve your capacity?
If some of your equipment is outdated or obsolete, would an upgrade help improve your overall capacity?
Consider the following:
Purchasing new equipment can be expensive, but remember that competitive advantage is gained from getting products to market quicker than your competition.
If you have not yet started your business, let us help you determine the feasibility of your new idea.Go
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If you have been in business for more than 2 years, determine the crucial next steps for growth.Go
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