7 Small Business Performance Improvement Strategies

Employee performance reviews are a regular part of many organizations, but when is the last time you considered the big picture? Companies spend around $230 billion on managing business processes¹, so it's worth implementing initiatives for improvement. Just as employee reviews can increase productivity, improvement in SMB processes can create large organizational wins. Still, it can be challenging to pinpoint the right strategies for your team. Here, we'll go over some of the most effective small business strategies for driving growth and maximizing return on investment.

Understanding Business Performance Improvement

Business performance improvement refers to the strategies and techniques that can be used to help make an SMB more effective, efficient and competitive. They are things that can be implemented to increase growth and profitability, without hindering employee productivity and engagement. Some of the key components include the following: 

• Process Optimization: Streamlining workflows to reduce waste, cut costs and increase speed or quality.
• Employee Performance: Enhancing skills, engagement and productivity through training, better management or other incentives.
• Financial Health: Improving profitability, managing cash flow, reducing expenses or increasing revenue.
• Customer Satisfaction: Using feedback to refine products, services or support systems to retain and attract more customers.
• Technology Integration: Leveraging digital tools and automation to improve efficiency and data accuracy.
• Strategic Alignment: Ensuring goals, initiatives and resources are aligned with the company’s long-term vision.

All in all, making minor process improvements here and there can help you exceed business goals and seize new opportunities. Take General Electric (GE) as an example. They adopted a method to improve process consistency and reduce defects and saw cost savings of approximately $12 billion over five years.²

7 Different Small Business Performance Improvement Strategies to Consider

Before choosing a new strategy, it's recommended to consider what you're looking to improve. Take some time to assess data analytics and understand what your business needs. Then, consider your current business development strategies to identify any inefficiencies or challenges. Once you have this information, you can start to consider some of the effective methods to improve business performance below.

1. Six Sigma Methodology

Six Sigma is a methodology used to make data-driven decisions by focusing on minimizing variation and defects in business processes. It uses statistical tools and a structured framework to improve quality and consistency. As per their standards, a process is considered optimized if it produces less than 3.4 defects per one million cycles, making it common for use in the manufacturing industry. 

The two primary processes used in Six Sigma are DMAIC and DMADV. 

DMAIC is used for processes that are already in place to help businesses identify areas of improvement. It's an acronym for: 

• Define the problem and customer requirements
• Measure current performance
• Analyze data to find root causes of defects
• Improve the process by eliminating the causes
• Control the improved process to sustain gains

DMADV is used for new processes. The first three letters in the acronym are the same, while the remaining two change to:

• Design new processes for products and services, customer satisfaction or whichever other target you choose
• Verify the chosen design

Six Sigma helps businesses identify what’s not working, eliminate waste and standardize success. Although often reserved for large-scale productions, SMBs can use the principles of Six Sigma to reduce errors, improve customer satisfaction and streamline operations.

2. Lean Manufacturing

Lean manufacturing is a strategy focused on eliminating waste and maximizing value throughout your business processes. It's also referred to as lean production, or just-in-time production. Waste, in this context, refers to anything that doesn’t directly add value to your customer, like excess inventory, overproduction or inefficient workflows.

Initially developed in the automotive industry, lean manufacturing has since been adapted across various sectors. Its five core principles are:

• Identifying value
• Mapping the value stream
• Creating flow
• Establishing pull
• Pursuing perfection 

Lean allows small businesses to operate more efficiently by reducing operational costs and creating more streamlined processes. It’s especially beneficial for teams with limited resources who need to maximize output without sacrificing quality.

3. Continuous Improvement

Continuous improvement, often associated with the Japanese concept of Kaizen, involves making small, incremental changes to processes on an ongoing basis. Rather than waiting for a major overhaul, this strategy encourages businesses to evaluate and refine how they operate regularly. 

The key to continuous improvement is consistency; minor daily or weekly enhancements can add up to significant gains over time. This strategy aims to remove three types of organizational waste:

• Muri (overburden): Excess strain put on resources, both machines and people.
• Muda (wastefulness): Practices that use resources, but don't add any value to the business. 
• Mura (unevenness): Overproduction that creates waste.

Continuous improvement promotes a culture of collaboration and accountability in many SMBs. It empowers team members to take initiative and fosters a mindset of progress, not perfection. 

4. Total Quality Management (TQM)

Total quality management (TQM) is a comprehensive approach that focuses on embedding quality into every aspect of a business, primarily regarding better customer service and continuous improvement. At the heart of TQM is the belief that customer satisfaction is the ultimate measure of quality. To achieve this, businesses must continually improve their processes, products and culture.

TQM is built on several core principles, such as:

• Customer-focused improvement
• Total employee involvement
• Process-centered thinking
• Integrated systems
• Fact-based decision-making
• Continuous training and development

TQM can help align teams around shared goals and improve consistency across customer interactions. While it requires a company-wide commitment, the payoff is a stronger brand reputation and long-term customer loyalty.

5. Plan Do Check Act (PDCA)

PDCA is a four-step, cyclical process used to test and implement changes in a structured and low-risk way. It’s ideal for small businesses looking to refine processes or introduce new ideas without overhauling their entire operation at once. PDCA is an acronym that stands for: 

• Plan: Identify the problem and create a hypothesis or strategy
• Do: Implement the plan on a small scale
• Check: Measure and evaluate the results
• Act: Standardize the change or adjust the approach based on findings

This strategy supports thoughtful experimentation. PDCA allows you to iterate and improve before scaling when testing strategies for driving business. It helps minimize risk while fostering a culture of learning and continuous progress.

6. 5 Whys Analysis

The 5 Whys is a simple yet effective problem-solving technique that helps you get to the root cause of an issue by asking “Why?” five times in succession. Each answer forms the basis of the next question, allowing you to move past surface-level symptoms. For example:

• Why did the shipment arrive late? → The delivery was delayed.
• Why was the delivery delayed? → The order wasn’t prepared on time.
• Why wasn’t the order prepared on time? → The materials weren’t available.
• Why weren’t materials available? → The supplier wasn’t notified in advance.
• Why wasn’t the supplier notified? → The automatic reorder system failed.

By digging deeper, SMBs can uncover the underlying issue and make meaningful changes that prevent the problem from recurring. Plus, this strategy doesn’t require any special software or large teams; just curiosity and discipline. 

7. Business Process Management (BPM)

Business process management (BPM) is a structured approach to analyzing, modeling, improving and optimizing your business processes. The goal is to make workflows more efficient, more effective and better aligned with your strategic objectives.

BPM typically follows this cycle:

• Process Mapping: Look at your current processes and create a map for them from beginning to end
• Model: Visualize what ideal processes look like and test scenarios
• Execute: Implement the process
• Monitor: Track performance metrics
• Optimize: Identify and apply improvements

For small businesses, BPM provides a clear view of how work gets done. Just make sure that you use relevant key performance indicators (KPIs) to help keep track of long-term changes. Many small teams use BPM software to map and automate processes, but even a basic flowchart and a spreadsheet can be powerful tools for getting started.

Choosing the Right Small Business Performance Improvement Strategy

Each of these performance improvement strategies offers unique advantages, but not every approach will be the right fit for every business. Start by clearly identifying your most significant challenges and evaluating which strategy aligns best with your goals and available resources. Think about whether your team would benefit from a structured, data-driven method like Six Sigma or a more flexible, iterative approach like Continuous Improvement.

And remember, you don’t have to do it alone. The right provider can help you with scaling HR strategies effectively. Book a demo today to learn how TriNet's HR solutions can support your performance management goals and help position your SMB for long-term success.