Let’s start by defining productivity - it’s sales per person. Not just their employees, but all the people directly involved in making the business work.

Outsourcing overseas can be ignored from the calculation if it’s to a low cost or infrequently used area.

So, measure their productivity by adding up the regular total hours they’re buying weekly and divide by 40 to give a ‘full time equivalent’ employment number. Divide this into annual sales to get a £output per person and compare to the average to that for their industry.

The Runagood® system gives you that exactly, but for now, accept that the UK average for small businesses, is £50,000 pa per person.

There are two major influences on productivity:

People - their:
- Knowledge
- Aptitude
- Skills
- Attitude
- Behaviour

Which are maximised by a mix of good recruitment – training – performance management techniques.

(Find out more about helping clients to improve these here: https://www.runagood.com/methods)

Systems - the extent to which they are used eg:
- Industry specialised software
- Industry specialised equipment
- Cloud backup of all data
- Personnel management
- Online accounting
- Business performance reporting
- Project management
- Stock control
- Estimating/ quoting
- Account management database
- Marketing contacts database
- Ecommerce
- Interactive website
- Social media
- Microsoft office/equivalent

(Find out more about helping clients to improve these here: https://www.runagood.com/methods)

But does doing all this ensure high productivity?

Yes…says the Bank of England Productivity Commission.

They recently looked at common features of the 250,000 small UK businesses that close every year (instead of being sold or inherited) and took evidence from insolvency professionals. They found that insolvent or not, few had any significant investment in people development or use of systems.

And they were comparatively overstaffed relative to their sales volume.

Systems replace heads

…and that’s why customers can’t speak to big companies anymore. They twigged a long time ago that technology can greatly reduce employment costs, everyone’s greatest overhead. Although the many hours we spend in call queues would suggest they went too far, they nevertheless get away with it because all their competitors did the same, and we now have no alternative.

Systems predict trouble

Another feature the research referenced was the low quality of information that they had available which only systems can provide. These throw off management information which enables instant tracking of what’s happening throughout the business, enabling quick decisions that head off trends otherwise affecting sales, profits and cashflow.

A final point they made is that so many systems are now so cheap that there is surely no excuse for not investing in them.

Yet most small businesses are greatly underusing systems

Why?

In our Partners’ daily Business Dashboard® assessments for small businesses (see all the tech at: https://www.runagood.com/technology) they frequently uncover low productivity allied to low systems use.

And in discussion with business owners, they experience resistance to the evidence, saying that they already have successful ways of doing things manually that everyone understands and which it’s too risky to abandon.

More specifically these are the concerns they mention:

Technophobia generally (e.g. “Haha I’m a dinosaur”)
Perceived extra cost (“I’m sure there are catches”)
Learning curve (“Can’t afford the time to master new tricks”)
Choosing the wrong system (“A screwup would put me out of business”)
Wasted time (“If we get it wrong”)
May not deliver results (“Waste of money recovering”)
Distrust of suppliers (“They are all dodgy I’m told”)
Fear of consultants (“Far too costly”)

These are all understandable, especially for people who are not ‘digital natives’.

So, Runagood® has developed ways that enable its Partners to ‘de-risk’ the migration to systems-based ways of working for clients.

It always starts with a free assessment and report. See an example here.

This takes 30 minutes overall including feedback and at the end your client has a free report that spells out their productivity opportunity and what you can do to implement solutions for them.

As a Runagood® Partner you have access to a huge resource base that enables you to guide your clients through safe systems selection and migration for profitable, recurring fee income.

The service is affordable by any size business yet profitable for Partners thanks to full automation of business consultancy processes.

Typical strapline:

Chartered Accountant and AI Business Advisor®

“Solving problems and ambitions quickly and affordably”.

By Duncan Collins

Founder of Runagood.com Ltd

Are systems making your clients’ businesses productive?