Being more organized is something that many people aspire to, but for small business owners, learning to be better organized is especially vital. Without even realizing it, being disorganized could be chewing away at profits. Here are five ways in which disorganization can hurt the bottom line of small-to-medium sized businesses and why these pitfalls need to be avoided in order to achieve business success.
1. Time is Money
In a 2011 survey, more than half of business leaders claimed they lose nine working hours every week because of disorganization. Poor organization means that you and your employees waste time looking for misplaced documents or tracking down information that should have been immediately at hand. Your business is paying your staff during those hours even though they are not being productive, which is a big drain on your resources.
2. Missed Deadlines Hurt Your Reputation and Finances
Disorganization increases the risk that your small business will miss deadlines. Miss a client deadline and your reputation will suffer; you even run the risk of losing that relationship that you have worked hard to foster. Miss a deadline for paying your taxes or another bill and you could be facing financial penalties, which take money out of your business.
3. Lost Opportunities
When opportunity knocks, is your business ready to respond? Disorganization can mean that you are not able to make the most of opportunities that come your way. For example, you might not be able to take on that lucrative rush order for a client because you simply don’t have the systems in place to turn it around fast enough.
4. High Employee Turnover
No one likes to work in a disorganized workplace. According to business consultant Karl Sakas, disorganization is the number one reason for high employee turnover. Not only could your disorganization cost you your best talent, but it could also leave you facing the costs of recruiting new employees to fill the empty roles.
5. Burnout
Disorganization leads to stress. As the owner or manager of an SMB, you need to be able to perform at your best in order to give the company a clear direction and focus. If you’re stressed, you won’t be able to lead effectively. Even worse, you’re likely to spread the stress to your employees, which can have a negative effect on their productivity.
Conclusion
If you’re running a business, you simply can’t afford to be disorganized. Wasting your organization’s time and talent could lead to the business failing, no matter how good the original business plan. Fortunately, it’s not too late to turn things around and improve organization in your small business.
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