Business Tips

All businesses have the potential to make savings, sell more, streamline processes and boost profitability.

You can uncover this potential by finding out what makes other businesses effective and then introducing this best practice into your own operations. Evaluating how your operations compare with the most effective and profitable enterprises, and then using the most successful elements in your own business, can make a big difference.

This guide explains what best practice is and how identifying it and introducing elements in your business can bring significant benefits.

What is best practice?

Best practice applies to every aspect of your business - from how you recruit staff to how you market your business or use new technologies. It involves keeping up-to-date with developments in your sector and measuring your performance against market leaders.
Best practice is based on the principle that the best way to learn is through the experience of others. One way of doing this is through benchmarking. Benchmarking allows you to compare your business with other successful businesses to highlight areas where your business could improve.

What are the benefits to my business?

A best practice strategy can help your business to:

• become more competitive
• increase sales and develop new markets
• reduce costs and become more efficient
• improve the skills of your workforce
• use technology more effectively
• reduce waste and improve quality
• respond more quickly to innovations in your sector

By monitoring these key areas, leaders are able to compare their performance with that of competitors to ensure they remain competitive today, and to help them plan and manage future changes.

Management best practice

Many surveys have revealed that the most successful businesses are those which adopt best practice methods and are managed by inspirational leaders.
Management best practice involves:
• the communication of a clear mission and strategy
• leadership by example
• the setting of demanding but realistic targets
• an open and communicative management style
• clear and careful strategic planning
Successful leaders harness a number of business tools to improve their business, including:
• benchmarking
• forecasting
• financial planning
• strategic planning

Best practice in people management

The cliché about people being your most valuable asset is true. The most successful businesses have realised this and have actively looked at how they can get the most from their employees.
Key issues include:
• involving employees in the development of the business
• communicating with employees
• adopting flexible working and policies that encourage equality and diversity
• offering employee development and training

Employees are often in a position to see where improvements to working methods can be made or when market demands are changing. For example, production staff are most likely to be aware of inefficient production processes while customer service staff are most likely to be aware of common sources of complaints.

Involving employees in reviews and developing open channels of communication can help ensure that you are not overlooking obvious improvements. It can also help you gain employee trust, commitment and buy-in when implementing changes, if employees have been involved in the process.

Good people management should extend across all areas of your business. Recruitment, training and people development, working practices and the working environment are all areas where best practice can benefit both the business and your employees.

Improving business operations through best practice

Most businesses have some operational issues that can be improved through the introduction of best practice methods.

Areas that could offer potential for improvement include:

• quality management
• stock control, delivery and supply chain management
• purchasing and ordering
• information management

Improvements could include the introduction of quality management systems, automated stock control or just-in-time ordering and delivery. However, knowing where to start is not always easy. Benchmarking can help identify the areas where there is room for improvement
Once you have identified the areas for improvement, you can look to implement changes and improvements. You might want to consider joining an organisation such as the Business Process Management Group (BPMG), through which ideas are exchanged on best practice in business.

Best practice in sales and marketing

Businesses that use best practice management processes are often among the first to use new technologies to improve the reach and effectiveness of their marketing. Developments in technology mean that marketing techniques that harness the power of the Internet, email and mobile telephony - often referred to as e-marketing - can be used to market the products and services of even the smallest business.

There are a number of benefits to e-marketing including:

• worldwide reach - a website can be seen by visitors from all over the world

• lower costs - a website can cost much less to set up and run than a traditional shop and hundreds of email marketing messages can be sent for the price of a local phone call

• a level playing field - small businesses can compete alongside the websites of much larger businesses

E-marketing methods have also made it easier for businesses to target new markets that were previously out of reach. For example, a website might allow a business with one outlet to sell its products and services to customers nationally.

Encouraging innovation

Fostering a culture of innovation and creativity can help you stay one step ahead of your competitors by allowing you to work flexibly and proactively. Innovative businesses are able to react quickly to changing markets, customer expectations and needs and are often able to see changes coming before others.

Innovative businesses are always looking at their existing products, processes and procedures for possible improvements and developments to help them stay at the cutting edge.
These businesses are typically entrepreneurial in nature. They have strong, inspirational leaders and management and skilled, involved employees. To learn more about the contribution innovation can make to your business and the global economy

Innovation may come in the form of small changes to existing products or services -for example increasing the number of mega-pixels on a digital camera - or in the form of a whole new product or service. The innovation may come from internal sources such as a product development team or be inspired by external forces such as customer requests or developments in related technologies.

Using technology to achieve best practice

It is possible to give your business a distinct advantage over your rivals by making good use of information technology.

Consider the following:

• The Internet has revolutionised the way businesses communicate with customers and suppliers, market themselves, access information and buy and sell products.

• Broadband is an always-on high bandwidth Internet connection. The high bandwidth makes sending and downloading information over the Internet much quicker than a dial-up connection, and so improves business efficiency. In addition, users pay a fixed monthly fee, which makes it easier to control costs.

• Wireless and mobile technologies mean that you can now work from anywhere. This can lead to increases in productivity, improved communication and more flexible working methods such as home working.

• Integration of your databases and systems can bring significant cost savings and improvements in efficiency.

Develop the culture of my business

Excellent performance in this area results in being able to:

• agree values and assumptions that encourage behaviour that is consistent with your business' overall vision and strategy
• make sure your personal behaviour, actions and words consistently reinforce these values and assumptions
• communicate agreed values to people across your business and motivate them to put these into practice
• put in place policies, programmes and systems to support agreed values
• continuously monitor and adjust values and assumptions and the ways they are applied
In order to improve in this area, you may want to get some advice on:
• different definitions and types of business culture
• the importance of values in underpinning individual and business performance
• internal and external factors that influence business culture
• the relationship between business culture, strategy and performance
• the principles and methods of managing culture change within businesses

Provide leadership for my business

Excellent performance in this area results in being able to:

• develop and clearly communicate the business' purpose, values and vision
• steer the business successfully through difficulties and challenges
• develop, select and apply leadership styles that are appropriate to different people and situations
• motivate people across the business to achieve their objectives and reward them when they are successful
• through your performance, win the trust and support of staff and key stakeholders and get regular feedback on your performance

In order to improve in this area, you may want to get some advice on:

• the differences between management and leadership
• how to create a compelling vision for an area of responsibility
• how to apply different communication methods and leadership styles to different situations and people
• how to successfully apply different methods for motivating, rewarding and influencing people
• how to get and make use of feedback on your leadership performance
• how to develop the leadership capability of other people and follow their lead