1. Don’t be afraid of efficient tools and technology
It may sound like an obvious solution, but the potential for productivity gains when upgrading the processes used to create products is massive. Furthermore, many entrepreneurs (and employees!) tremble when someone suggests upgrading or making changes to an existing system. This is often because the current system is well-known to the operators, while a new system introduces change and brings people out of their comfortable patterns. Neither of these fears should stop a savvy entrepreneur from rocking the boat and improving a process. The payoff could result in very big gross margin improvements.
2. Train employees on “best practices,” but encourage new ideas
Many companies have training materials known as best practices that relate to the specific activities involved in completing a specific task. These best practices are often created from years of industry knowledge, tests, and data that all converged on the most efficient way of completing a task with high quality. And while existing best practices are a great tool in an entrepreneur’s efficiency-boosting arsenal, we shouldn’t be content with them. Who is to say that an even better best practice couldn’t be developed by one of your employees? Fresh ideas are out there, they merely need to be recognized and implemented.
3. Examine industries outside of your own to gather out-of-the-box solutions
It seems that there is an unspoken rule in many businesses to either look within their companies for solutions or look to copy the solutions and techniques of their competition to solve a problem. But playing the copying game can only get a business so far. To truly gain significant competitive advantage and boost gross margin (especially to boost gross margin over that of a competitor), a business needs to have channels pulling information from many sources. Like a tree pulls nutrients through countless roots, so should a business be open to drawing information from different (and often completely unrelated) industries in order to create something truly revolutionary.