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, the manufacturer can increase their capacity and output by working smarter before you buy more equipment and hire more workers.
Increasing your output, invoicing, or sales without needing to buy new resources immediately sets you up for future growth.
Boost capacity quickly
Follow these key tips to improve capacity in your business.
Improve your skills
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.
Find an experienced business person who is willing to mentor you for a couple of hours each month.
Smooth out inefficiencies and systems
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:
- Eliminate unnecessary and time-consuming jobs to improve efficiency
- Play to your employees’ strengths by delegating work to those who are best qualified for the task
- Develop templates for everyday documents like invoices
- Encourage staff to continually seek feedback and evaluate the quality of their work – we can all make improvements
- Check that progress is really matching your business goals
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.
Document each important task or daily process in your business so that any new employee can start being productive on day one.
Sorting out staff requirements
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 scale 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.
- Do you currently have the right mix of employees in your business?
- Which employees are directly contributing to output and which are overheads?
- Are there any unnecessary employees that you might need to make redundant, or change their role or re-skill to contribute to output?
- Can you retrain existing employees so you don’t make them redundant?
- Are there new skills that you should have in-house?
Identify third-party contractors or other companies that could take up extra slack to increase your capacity at any time.
Having other people or businesses that you can contract parts of what you do can ease temporary capacity issues before you decide to employ full-time staff.
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 sit there doing nothing. Could you redirect that capital to improve your capacity?
Review your equipment
If some of your equipment is outdated or obsolete, would an upgrade help improve your overall capacity?
Consider the following:
- To reduce costs, consider leasing key equipment or machinery
- Investigate new technology that removes redundant processes or replaces manual tasks
- Talk to a similar business in your industry to find out their equipment needs
Purchasing new equipment can be expensive, but remember that competitive advantage is gained from getting profitable products to market quicker than your competition.
Before you take action on any of the information above, we recommend consulting with a qualified business advisor that understands your unique needs and situation for your specific business and/or personal plans.