Efficiency

This morning at 0630, I was swimming at a local swimming pool when lifeguards blocked off a section of the least used section of the swimming pool.  This was because they were short of a single staff.  The swimming pool is two feet deep from one end and four feet deep in the other end.  However, what surprised me was during that time period, there was less than 10% capacity.  Their policy is the full force of four lifeguards at all times, regardless of capacity.   The argument is that they might miss something from a different angle.     So, does that mean you have a full-force lifeguard even if there is 1% capacity?  Where is the cost-benefit?   

If you are a business owner, I am sure you will ask yourself the number one question.   Where is the "Efficiency"? 

Regardless of what industry, without efficiency, the business will fail.   If you want to know if you are running your business competitively, you will want to compare yourself with your competitor.  For example, if you own a  bakery shop and you sold a loaf of bread at $3.00 while your competitor sold theirs for $3.00 too.   What you want to know is what is their cost.   Cost of raw material and labor.   This is just a micro way to see measure efficiency.  However, the best indicator is to measure your business is the overall performance by your industry on yearly basis.   To see the ratio your major operating costs like labor vs income, raw material vs income, or rent vs income with your peers.