Efficiency can tilt the odds in your favor though. Take two otherwise identical businesses with only one difference — operational efficiency — and you can predict far better than chance which will be in better shape five years out.
Efficiency is especially important in the earliest stages of your business’s life. When you have little or no revenue and you feel like you’re doing everything yourself (or actually are doing everything yourself), you literally don’t have a minute or dollar to spare.
These seven tactics work well for entrepreneurs like you. Each offers a clear efficiency-enhancing proposition, whether it’s enabling faster scaling through effective bulk purchasing or automating key tasks that don’t by themselves generate any revenue. Implement them, stick with them, and chances are good you’ll find yourself in a better position than you’d hoped.
1. Begin Working With a Reliable Wholesale Platform Early On
Forging relationships with makers is time-consuming work. As soon as you’re able, transition to a reliable wholesale platform that makes it easier to find and source from the brands you love.
Choose a provider that understands the needs of emerging retailers. Let’s say you sell women’s clothing online or in-store. Choosing a women’s wholesale apparel platform with free returns ensures you can try out inventory before committing. Also, look for platforms with payment terms that work with your business’s cash flow.
2. Keep Your Physical Footprint Lean
If your team can do its job remotely just as well as it can (or better) in a central location, why bother with a permanent office space? You’ll avoid the overhead costs associated with leasing and maintaining your own office, not to mention the competitive disadvantage of a long-term lease.
If you do need some physical space for your back-office teams, look to coworking or professional flex space to serve those needs without locking in a long-term lease. Otherwise, keep your storefront and warehouse posture lean, adding space only as necessary to sustain your growth.
3. Use Contract Labor When Possible and Practical, But Don’t Sacrifice Quality Work
The idea of using contractors for everything is appealing, but it comes at the potential cost of quality, on-deadline work. A good rule of thumb is to outsource work to contractors when it’s clear that they’re going to do a better job at it than you and when you can’t get it done faster. For smaller startups, this often means important but non-core functions like HR, accounting, website design, and copywriting.
You do need to hire employees; you can’t run your business as a sole proprietor forever. But do so deliberately and only as mission-critical needs arise that you can’t address on your own or with reliable contract labor.
4. Automate Employee and Contractor Onboarding
Your employee and contractor onboarding process should be as friction-free as possible. That ensures the relationship gets off to a good start and doesn’t bog your team down with logistics that don’t directly produce revenue.
On the contractor side, using a digital platform that matches businesses with contract labor is the obvious solution. The platform handles most of the heavy lifting so you can focus on the work.
On the employee side, HR automation is the key. Use a human resources program that handles all the dull legalities digitally and securely, keeping email back-and-forth to a minimum and eliminating physical paper from the equation.
5. Automate Your Marketing Operation (And Control Your Spend)
Your digital marketing operation needs to be low-friction as well. You’re probably aware that you can automate email marketing pretty efficiently, but you’ll also want to make sure you and your team need to pay as little attention as possible to your paid search and social marketing too.
Automated marketing channels can quickly sap your budget if you’re not careful. Be sure to set a maximum monthly spending range (with a hard cap that you try to avoid hiding) to keep costs in check.
6. Develop Social Proof Through Local Word-of-Mouth Networks and Organic Social Media Marketing
One way to make your marketing more efficient while controlling costs (the definition of cost-effectiveness) is to work on developing social proof through real-world word-of-mouth networks and online social media communities. You shouldn’t have to spend a fortune to get would-be customers to trust your brand. That should come naturally as you deliver actionable, informative content to them and cultivate a brand image that sells itself.
7. Answer to No One You Can’t Trust
Is bootstrapping (self-funding) really the most efficient way to launch and scale a business?
Self-funding does have obvious trade-offs and could limit your ability to scale as quickly as you’d like. But it has some undersold advantages as well. Perhaps most importantly, self-funding is the only way to ensure you don’t have to answer to anyone you can’t trust, be it a bank or venture capital firm. Eventually, you’ll need to accept outside investment, but why not bootstrap as long as you can until then?
Duplicate Yourself, Not Your Effort
It’s been said before but always bears repeating. As an early-stage entrepreneur, you can’t afford to waste any effort.
These seven strategies to start and scale a business more efficiently will reduce the amount of effort you waste as a new business owner. They’ll help you avoid costly duplication of effort and instead allow you to duplicate your company’s most precious resource: you.
You have to follow through for these strategies to pay off though. You really do need to keep your physical footprint lean for longer than you’d like. You have to be comfortable automating business processes that aren’t part of your core value proposition. You need to leverage low-cost marketing tactics like word-of-mouth and organic social media even if they don’t come naturally.
Do these things and you’ll find yourself several steps ahead of your competitors. And don’t wait; those competitors certainly aren’t.