The coronavirus pandemic has put a lot of pressure on many existing businesses that could not adjust to change. As a result, it’s not uncommon to find family companies turning to investors or putting themselves up to sale for support. If you’ve recently acquired an existing business, your top priority is to run an efficiency audit to identify issues.
Essentially, the efficiency audit acts as a diagnostic tool that evaluates the areas where improvements are necessary. The purpose of the audit is to reduce costs and maximize revenues. It can ensure that the business remains competitive in an ever-growing and changing market. It is essential as countless companies transformed their processes during the pandemic.
When competitors become more efficient and innovative, no company can afford to stay behind. Therefore, the key focus areas for the audit should include equipment, employees, operations, and finances. Here are some of the most popular transformations that can bring back an old and unsuccessful business to life.
Modernizing electrical systems and machinery
Many existing businesses are unlikely to keep up with technology. Many continue to fix and maintain outdated transformers and other equipment to save costs. However, this can pose two main risks for the company. Firstly, breakages are more frequent although regular maintenance as the equipment isn’t suited for modern usage. Secondly, repairs can be costly and time-demanding.
On the other hand, experts such as gff power encourage business owners to update their systems with retrofitting electrical solutions. The process can be highly effective as it limits downtime and saves costs in the long term. Indeed, retrofitted equipment can modernize and stabilize the system without requiring complete replacement.
Switching to updated software and operating systems
According to Statista data, over 40% of industries handling confidential data in Education, healthcare, and legal services use out-of-date software. So why do these existing businesses keep outdated devices? First, there is a cost issue in updating operating systems and software as the team may not rely on familiar tools. Time is also a crucial factor as maintaining device updates can be time-demanding.
Unfortunately, outdated systems lack essential security patches, making them easy to penetrate for cybercriminals. They are also at high risk of failure, data loss, and bugs. In addition, the manufacturer may not support old systems anymore, which means that businesses have no access to assistance in an IT issue.
Finally, outdated systems can show malfunctions or inability to cope with the current workload, causing a significant drop in productivity. In other words, while money and functionality are the main arguments to maintain an outdated system in an existing business, they are also the main inconveniences of running out-of-date software and operating systems.
Reviewing the existing organizational structure
Family-run companies often develop functional structures, dividing their teams into departments and skillsets. While the system can improve specific decisions in each department, it can make it hard to work on cross-department projects. For instance, customer acquisition strategies should include sales, marketing, and customer service teams in a standard plan. However, due to the nature of an existing business, these teams often work separately and can struggle to share information. As a result, each department can duplicate or even undone work.
Improving general communication across the existing business could tackle the issue. However, more and more companies find a change in organization structure more practical. Instead of focusing on functionality, bringing teams together in a process-based division can be more effective. This would ensure that everyone working on customer acquisition is on the same team, for example.
It is essential to determine the relevant processes before proceeding to team division. Typically, the business plan and business strategy outline the vital functions.
Modernizing business perks to attract new talent
Family businesses die out because they fail to remain relevant, not only to their customers but also to their employees. Free office food and entertainment areas used to be popular treats to encourage office presence and loyalty. However, the pandemic has transformed the needs and preferences of modern employees. The post-pandemic perk culture demands benefits that focus on flexibility, health, and financial stability. Indeed, flexible hours, unlimited holiday packages, and free health programs have become attractive advantages that employees seek. While these perks were present in generous, forward-thinking companies, such as Netflix, all businesses should now consider creating a good quality working life for their staff. Young generations in the workforce have pushed back against meaningless perks and work cultures that no longer meet their needs.
In conclusion, acquiring an old family company can be a unique opportunity to inject new life into a dying business. Fundamental transformations are necessary to preserve its market position. Modernizing work systems, both electrical and IT, can preserve productivity and security. But the company also needs to embrace a post-pandemic organizational structure and work culture to remain relevant.