Unlock Hidden Revenue: How Operational Analysis Can Transform Your Business Efficiency

Written By: Katie Whitcraft, Operations Expert & COO

What Are Business Operations?

Before diving into how operational analysis and efficiency can transform your business, let's clarify what we mean by “operations.” If you're among the majority of companies without a COO or Operations Director, understanding operations might seem elusive. Operations encompass the behind-the-scenes efforts that bring ideas to life, covering every essential area of a business—production, sales and marketing, finance and accounting, and human resources.

In short, operations are the foundation for turning concepts into tangible products or services for your customers.

A COO or Operations Director plays a vital role in this process. They scrutinize the business’s processes and systems, optimizing each to minimize costs and boost revenue through efficient resource allocation. With experience in aligning an organization's vision with the resources it needs, operations leaders drive efficiency that directly impacts the company's financial health.

Why Operational Analysis and Efficiency Matter for Your Business

Operational analysis offers a detailed examination of how your business transforms ideas into products or services. This analysis spans all aspects of the business—from internal communication and vendor sourcing to hiring practices. The goal? To identify inefficiencies that, if addressed, can reduce costs and improve revenue.

Consider this: a recent PwC CEO survey found that CEOs estimate that their administrative functions are 40% inefficient and Array’s research indicates inefficiencies can cost businesses between 20% and 30% of their revenue.

If a company isn’t focusing on operational efficiency, it’s likely leaving money on the table.

Imagine, for example, raising a $20 million funding round and unknowingly losing $6 million to inefficiencies—that’s like burning money.

KC Green. "Gunshow". On Fire. 2013.

Yet, operational efficiency often gets overlooked. Many companies are so focused on the next sale, product launch, or funding round that they ignore systemic issues that could streamline these very processes.

Have you ever heard or said, “Let’s just do it this way for now and fix it later” or “We’ve always done it this way”?

This is common when pressing priorities overshadow the need to diagnose and improve underlying systems. But imagine how much smoother every launch, sale, or funding round would be if your processes weren’t holding you back.

Operations Analysis and Efficiency Consulting vs. Hiring a COO

If you’re wondering whether your business needs a COO, here are a few points to consider:

1. Are You Ready for a COO?

   
   

   If you don’t yet understand the current state of your operations, finding the right COO could be challenging. COOs are not a one-size-fits-all role; each company’s needs are unique. Conducting an operations analysis first can clarify what you need from this role and set your future COO up for success from day one.

   
   

2. Can You Afford a Salaried COO?

   
   

   A U.S.-based COO or even a Director of Operations commands a high salary, often well over $100,000 and (sometimes) up to $400,000. Instead of committing to this expense upfront, it may be more cost-effective to first invest in an operational analysis, which can deliver specific insights and action plans without the long-term commitment.

   
   

3. Objectivity Matters

   
   

   An external consultant can bring fresh eyes to your organization. Without emotional investment in the status quo or preconceptions about your processes, a consultant can evaluate your operations with objectivity. This allows them to deliver hard truths that might otherwise go unaddressed and implement targeted improvements that make a measurable difference.

Ready to See What Operational Analysis Can Do for Your Business?

Operational analysis can uncover overlooked inefficiencies, streamline processes, and ultimately improve your bottom line. If you’re ready to explore how refining your operations can impact your business, click below to schedule a 30-minute consultation.

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