How Inefficiency is Killing Your Business “BIGLY” (Part 1)

Loss in employee productivity due to inefficient processes

Are your employees constantly complaining about how manual complicated, or unclear their tasks are?

Do you bring in great revenue, but at the end of the year you have little profit to show for it?

Do you find yourself bringing work home, “catching up” on the weekends, or even worse, on vacation?

These are all warning signs that you may be maintaining inefficient processes.

For what it’s worth, some multi-million dollar companies face these same problems. During my time as a IT Project Manager, I developed a knack for identifying how much a business is losing by maintaining inefficient processes and creating a road map to help businesses improve them.

How much is inefficient processes costing your business? Let’s run some numbers:

Let’s say you have five employees and after each transaction they have to print three sheets of paper for filing. Let’s assume the whole process take two minutes to complete (this is a low estimate — chances are, it may take your employees five minutes to get back to their desk). Let’s also assume each employee processes 60 transactions a day.

For one employee, he/she is losing:

· 2 hours a day (120 mins) — — 2 minutes * 60 transactions

· 10 hours a week (600 mins) — — 120 minutes * 5 days

· 40 hours a month (2400 mins) — — 600 minutes * 4 weeks

· 480 hours a year (28800 mins) — — 2400 minutes * 12 months

So, let’s recap, one employee can lose up to 480 hours’ of work time each year — and that’s only if it takes your employees 2 mins to print three sheets.

Now, for the kicker (deep breath), let’s convert time lost into an hourly rate. Let’s assume your employees earn $20.00/hr. At this rate, your business is losing $9,600 a year for each employee (480hrs * $20.00/hr)! If you have five employees your business is losing $48,000 each year. Again, this is only if it takes your employees 2 mins to print three sheets for filling.

· What if it took your employees 5 minutes? Your business would lose $120,000 each year

· What if it took your employees 5 minutes & they processed 100 transactions a day? Your business would lose $200,000 each year

Is losing tens or hundreds of thousands a year something you can afford?


Here are the steps I take my private clients through to optimize their business processes:

Note: it’s integral to perform this evaluation, not only with senior leaders, but also with the employees that perform these tasks.

1. First, we document your business’ processes or tasks. This includes detailing all the steps, time and resources required to complete each process or task.

2. Next, we evaluate each task to determine how we can make it more efficient while maintaining the quality, timeline or any other key factor.

3. Lastly, we document what needs to be accomplished to make these tasks more efficient and how much your business will save by doing it

Inefficient processes are like a slow bleed and they will bankrupt your business in no time — I just showed you how your business could already be losing $48,0000/yr based on 2 minutes of additional work. I implore you to prioritize correcting the inefficiencies in your business today!