Article by Robert Green, NDIS Business Advisor, Western Sydney Business Centre
NDIS – Productivity and Profitability
Two of the biggest challenges for any business are productivity and profitability. We have heard those two words used in reference to the operations and plans of big business. And that is where it stops in our mind.
But, these two things are more critical in a small business. Profitability is a direct result of productivity. Put simply, productivity can be roughly described as a measurement of how many outputs one unit of labour can produce in a unit of time. The greater the outputs the better the productivity.
There are several things which can influence productivity. If we are talking about an NDIS based business, the productivity of an employee would be the number of participants the employee can service (by providing proper service) per period. This is a bit vaguer than the definition quoted above, but the principles are the same. So, what can be done to increase productivity? The clue in this case is in the inputs and the type of input. Productivity (and hence profitability) can be influenced by looking at what your employee type mix is and how you use your employees.
For instance, if you run a business which supplies therapeutic services, instead of using one of your trained therapists to do the initial assessments, vetting paperwork and preparing treatment plans based on the referrals, use a trainee to do the detailed work (and hence they get the experience they need) and use your therapists to do the overview checks and signing off on the treatment plan. The cost of inputs is lowered, and the use of higher earning inputs is increased.
Similar principals apply to any service your business might provide.
For help with your profitability analysis, call Bob Green at Western Sydney Business Centre or on 0490 251 615.