Business Operations | 9 mins read

Understanding Business Operations

understanding business operations
Mary Kate Morrow

By Mary Kate Morrow


In a competitive market, effective and efficient business operation can make the difference between your company succeeding or failing. Investing in idealizing business operation optimize business bottom line, allow evolution alongside current market trends.

What are Business Operations?

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Business operation includes the strategies and processes guiding key operational functions that ensure a company can run both efficiently and effectively. Businesses are necessarily complex in nature because they depend on multiple within organization processes being performed alongside sone another, and at the same time. Each company has very specific operations, depending on not only the industry type but also factors such as where they are on the supply chain to investor intentions.

Defining and establishing a business operation that is transparent and accessible to founders, staff, and investors are essential to a company's growth and expansion. Your business operation should function as both a failsafe and a model. By anticipating risks and roadblocks, businesses can decrease risks and eradicate problems before they worsen.

Financially, business operations help to avoid overspending and encourage appropriate resource allocation. Within staff, these operations are helpful for various operations, ranging from onboarding to delegation.

Business operation must necessarily evolve with company growth. When establishing a new business there are several key tips that a business operation manager, human resource professional, or small business owner must consider, including-

  1. Building a strong foundation- Hire staff carefully in order to avoid future issues for your entire business. It is essential for prolonged success that your team is goal-oriented and work well together.

  2. Facilitating open and transparent communication- Communication must be effectively and strategically used within any successful business. Transparency decreases confusion, unnecessarily wasted time, and energy. Mindful communication also stops potential conflicts or misunderstandings from breeding which results in less conflict in the workplace.

  3. Setting short and long-term goals- Develop goals that align with your business's culture, core values, and mission statement. Clear-cut short and long-term goals go a long way to help employees keep morale, productivity, and accountability.

  4. Decision-making based on data- Instead of making decisions based on emotion or intuition, successful companies use business operations to make decisions based on data. Human error is lessened when data is a deciding factor taken into important business decisions.

  5. Careful staff onboarding and role delegation- Developing a strong hiring and onboarding process will assist all parties involved with a business in providing the best service and products possible. Successful businesses have clear role expectations and use standardized performance measurements to ensure accountability.

  6. Receiving and implementing feedback consistently- Actionable, specific feedback and consistent evaluation mechanisms help you reevaluate and implement feedback into improving your business operations. Your staff and customers will feel heard and as a result, your customer support, customer experience, and customer service will become more effective and efficient.

  7. Adaptability and willingness to change- A sign of a successful business is one that is ever-changing with market conditions and technological innovations. Evolving business operations necessarily seep into every single department and role. As a company grows and expands, businesses need to reevaluate roles, departments, and company-wide initiatives in order to succeed in a competitive market.

Essential Elements of Business Operations

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Regardless of the industry type, all businesses have some essential elements that a business operation manager, human resource professional, or small business owner should consider. Below are some examples of the essential elements of any business operation-

1. Supply- Businesses must obtain supplies in order to produce their product. For optimal results, supplies must be as affordable and reliable as possible. For manufacturers, supplies include the tangible raw materials that they use to create their products. For service industries, supplies can be tangible such as office supplies, or non-tangible materials, such as data.

2. Versatility- Businesses must be willing to adapt in accordance with current trends and market changes. Rigidity in practices can quickly posit a business as inefficient and may eventually lead to complete failure
Consistency- Planning is essential in ensuring that your company can run smoothly and continue to grow.

Employees must understand their roles and what is expected of them within the business. Securing steady business operations will help the whole company to function as efficiently and effectively as possible.

3. Efficiency- Efficiency describes the labor accomplished in a single workday, either by an individual employee, team, or department. The value of efficiency directly translates into business profits, success, and bottom line. Efficiency provides a wide array of benefits, ranging from decreased wastefulness to massive cost reductions.

4. Effectiveness- Effective production occurs with the least amount of resource expenditure possible. Focal resources range from employee time to monetary cost. Efficiency is crucial for your business's profits, while effectiveness is essential for growth. Proper allocation of resources, mindful delegation, and conscientious resource utilization are primary indicators of an efficient business system.

Additionally, there are many common functions that all businesses can benefit from optimizing-

  • Establishing balances between departments through consistent communication and proper allocations in order to maximize operations.
  • Re-engineering processes when appropriate through the use of think tanks or revamping outdated practices.
  • Managing financials both at a departmental and strategic level.
  • Providing training and mentoring opportunities for employees regardless of their seniority or position title.

Operational Effectiveness vs Strategy

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Both operational effectiveness and strategy are necessary to accomplish an effective and efficient business operation. Especially in highly competitive and saturated markets, businesses must go beyond operational effectiveness by incorporating strategic positioning into their business operation.

Although operational effectiveness and strategy are often lumped together, they are very different. Operational effectiveness is defined as consistently doing things differently by assimilating into the most ideal current business practices. Strategic positioning is defined as developing a new business operation in order to stand out and gain a competitive advantage. While operational effectiveness is largely about duplicative actions, strategic positioning requires careful planning and careful choices.

Neither strategic positioning nor operational effectiveness is more or less important to a business's bottom line. Finding a harmonious relationship between both strategic positioning and operational effectiveness is where the most effective business operation is created and maintained.

The Importance of Effective Business Operations

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Idealizing a business's operations requires much planning, action, and accountability. Although it takes a lot of effort your business will directly benefit from all of the hard work put into optimizing your business operation. Benefits of effective business operation include-

  1. Profit increase- Business revenue positively correlates with improved business practices. Revenue will rise as your business becomes more efficient and effective.

  2. Optimal resource and investment usage- Businesses can best use their supply when they are running efficiently. When waste is decreased less raw supply will need to be purchased or extended by the business. Lower prices will have a trickle-down effect of allowing your business to be more financially competitive to your base, creating a better customer service experience.

  3. Productivity and efficiency boost- Productivity is defined as the process of being efficient, productivity is efficiency in practice. Productivity quantifies chronological output, efficiency quantifies input versus output.

  4. Encourages innovation- Creativity and preferred productivity solutions are much more likely to be explored and integrated into current business practices. As a result, strategic positioning will necessarily improve and profit your overall bottom line.

How to Improve Your Operations

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Efficient and effective businesses have solidified internal operations. There are many principle strategies that can be used to improve overall business operations, regardless of your specific industry. Some of these strategies that a business operation manager, human resource professional, or small business owner should consider include-

  1. Lead-in- Lead is an operational philosophy that focuses on constant business advancement. Executives can use various worksheets and planning aides to help analyze if they are operating their business as leanly as possible.

  2. Quality control- Developing programs that facilitate consistent feedback and implementing feedback when making future decisions is a pillar of developing a business's quality control operations. Ensuring products are as ideal as possible will result in your clientele receiving the best product or services that your business can provide. Better customer service result in increased business and elevate your specific business to a higher level of success.

  3. Planning- Proper planning will help your business to anticipate issues before they arise, giving you time to prepare for bumps in the road as much as possible. Planning will decrease both over purchasing and under purchasing as well as overstaffing or understaffing. By forecasting your business's supply needs, you will save both time and money.

  4. Team communication- Encourage communication with your team on a consistent basis. Regularly inquire about successes, failures, and frustrations incurring during current business operations. Remember to offer support, solutions, and validation when appropriate to your team members. Requesting and acknowledging feedback will encourage team-building and optimize bottom line.

The Value of Operations Software

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Business operation software can greatly assist companies in maintaining and growing their business's bottom line, manage time, and meet deadlines. Benefits of business operation software range from automating tasks where possible to decreasing wastefulness.

Benefits of using business operation software include-

1. Streamlining processes- Save time, meet deadlines, and accomplish tasks in order to stay on schedule and increase efficiency.

2. Prioritize goals- By streamlining projects, staff members can more easily discern which objectives are more important and which may require additional time and effort.

3. Increased accountability- Audits are easily obtained with a business operation software. Accountability increases when staff can easily keep track of project progress with information in one central location. Automated reports demonstrate compliance to your customers as well and increase overall customer satisfaction.

4. Promote collaboration- Easily share ideas and feedback with the rest of your team, increase the efficiency of staff communication, and decrease unnecessary and counterproductive workplace conflicts.

Although business operations are very complex, business operations software can help everyone involved in your business. When your business is performing as ideally as it can, you can focus on expanding your business plan. A highly successful business is dependent on effective and evolving business operations.


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  • Small businesses need to create, maintain, and consistently evolve their business operation in order to optimize their bottom line.
  • Every business contains essential elements of business operation, ranging from supply to versatility.
  • Your business process and bottom line will directly benefit from optimizing your business operation.
  • Every business needs operational effectiveness and strategy to accomplish an effective and efficient business operation.
  • Customer support, customer experience, and customer service will become more effective and efficient as a result of proper business operation.
  • Efficient and effective businesses have solidified internal company operation.
  • Business operations software assists companies in maintaining and growing their business's bottom line. Benefits of business operation software range from idealized customer service to more effective project management.
  • Every business can benefit from investing in business operation software so long as you make sure your business operation team is comfortable using it. When business operations are performing ideally, you can focus on expanding your small business.