Business Operations: 8 Ways to Optimize and Improve Them (2025)

Your store’s operations get more complex as your business grows. Adding team members means creating new systems and infrastructure to keep everything running smoothly. Without a clear plan, it’s hard to know if your company is operating at its best.

Understanding business operations helps you maintain efficiency as you scale. Let’s explore how to optimize your daily processes to support your company’s success.

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What are business operations?

Business operations are the day-to-day tasks and processes your company uses to generate revenue.

When your operations run efficiently, you get the most from your company’s resources while reducing costs and increasing output.

Your operational needs change as your business grows. If you run a small ecommerce business, you might handle most operations yourself or outsource specific tasks, like accounting and payroll.

Large enterprise companies often have entire departments dedicated to single operational areas—their accounting teams alone might include more than 100 people. These companies typically have a chief operating officer (COO) who oversees and improves all daily business activities.

Why are business operations important?

Strong operations help your business succeed by ensuring you use your resources—time, money, and people—effectively. When your operations run smoothly, you can turn your strategic goals into measurable results.

Operations become more complex as your business grows. Without clear processes and structures in place, inefficiencies can creep in, wasting resources, increasing costs, and missing opportunities for growth. When you focus on optimizing your operations, you can scale your business while maintaining product and service quality.

Well-run operations also help your business adapt to market changes. Whether you’re responding to shifts in customer behavior, supply chain issues, or new technology, having streamlined processes and well-trained teams lets you pivot quickly while minimizing risk.

Key elements of business operations

Four elements shape your business operations strategy: people, processes, technology, and location. Here’s what each involves:

1. People

As your company grows, you’ll likely spend less time on daily operations and more time on business development—like meeting with investors or planning for long-term growth. This means your employees become responsible for running your day-to-day operations.

The people element of operations include hiring the right talent for specific tasks and maintaining high employee morale and productivity. Larger companies often have human resources departments that handle these responsibilities, including hiring, onboarding, training, and development. 

2. Process

Business processes are the clear protocols that guide how your company gets things done. Successful businesses create defined processes for everything from developing products to scheduling social media posts. 

Document your processes to help:

• Find and fix operational inefficiencies
• Reduce errors
• Increase transparency
• Train new employees effectively
• Stay compliant with state and federal laws

For example, it’s easier to confirm your payroll system follows legal requirements when you’ve documented and consistently followed your process.

3. Technology

Technology includes all the tools you use to complete operational tasks—from software and hardware to machinery and physical resources.

Different industries need different types of equipment. A manufacturing company might invest hundreds of thousands of dollars in machinery, while a small ecommerce business might primarily need software-as-service (SaaS) subscriptions. 

4. Location

Location includes any physical spaces connected to your business, including:

• Office space
• Manufacturing facilities
• Warehouses
• Retail stores

Choose locations that cut costs and maximize revenue. For example, a retail business might open a store in a high-traffic area and place its warehouse near a major shipping hub.

How to improve business operations

1. Set goals and track KPIs
2. Improve your existing processes
3. Automate processes
4. Invest in the right tools
5. Evaluate your resources
6. Stay informed
7. Get outside perspective
8. Create an ongoing plan

At its heart, improving operations means increasing efficiency—either reducing the time or cost to accomplish a goal. Here are eight strategies to help optimize your operations:

1. Set goals and track KPIs

Improving operations is a long-term process. Set clear goals and identify key performance indicators (KPIs) to focus your efforts and measure progress.

For example, an ecommerce business might track: 

• Sales metrics
• Conversion rate
• Average order value (AOV)
• Fulfillment time
• Return rate
• Inventory turnover ratio

Have each department set specific operational goals that support your larger business objectives. For each goal, choose KPIs to measure success.

For instance, if you want to grow your customer base by 10% next quarter, your customer service team might aim to increase satisfaction scores by 15%, while your marketing team focuses on boosting organic search traffic by 20%. 

2. Improve your existing processes

After setting goals, examine the operations that support them: 

1. Document your current processes
2. Compare them to your actual business practices
3. Look for redundancies, outdated tools, or misalignment with company values
4. Work with your teams to identify improvements 

For example, your company handbook might outline a 10-step employee onboarding process, but start by looking at how your HR team actually brings on new hires.

Empower your employees to test and improve processes over time—optimization is ongoing work.

3. Automate processes

Process automation technology keeps improving. Even if you reviewed your operations recently, new opportunities have likely emerged. Look to automate any task you do more than once.

Consider automating: 

• Inventory management and reordering
• Social media post scheduling
• Common customer service responses

4. Invest in the right tools

Review the tools your teams use for key tasks. Learn about new options by reading industry publications or researching what works for similar businesses.

Say you run a technology company—you might compare your sales team’s tools with competitors’. If they use specialized customer relationship management (CRM) software while you rely on spreadsheets, explore whether a CRM would help your team.

Ask your team which tasks take the most time and estimate hours spent on each. Use this data to analyze costs and benefits before investing in new tools. Share your reasoning with the team to build support for changes.

5. Evaluate your resources

Regularly review how you allocate: 

• Budget
• Infrastructure
• Team capacity

Keep your resources balanced to maintain smooth operations. For example, if your accounting team is overwhelmed while marketing has extra capacity, you might hire accounting help or bring in contractors. 

You could also ask your marketing team to use their additional resources to support their department goals from your initial planning session.

6. Stay informed

Watch industry and market trends to keep your business competitive and focus your efforts where they matter most. 

For example, if you notice your target customers prefer buying through social media instead of in store, you might invest more in social commerce rather than opening new physical locations.

7. Get outside perspective

You don’t need to handle everything internally. Sometimes bringing in external help gives you the boost you need. 

Operations directors juggle many responsibilities—maintaining focus on business goals, managing daily operations, monitoring market changes, and keeping up with new technology. Even experienced managers benefit from fresh perspectives. Consider working with a business operations consultant to review your practices and suggest improvements.

Consultants often specialize in specific industries. For example, a manufacturing industry consultant might help you:

• Reduce shipping costs
• Find quality materials more efficiently
• Improve production systems to lower energy use

8. Create an ongoing plan

Optimizing operations never truly ends—that’s why large companies have a COO. Make improving operations part of your daily work:

• Monitor your KPIs regularly to track progress and stay accountable
• Schedule recurring check-ins with departments to gather feedback on new processes and tools and identify additional areas for improvement

Business operations across industries

Different industries have unique operational needs, challenges, and opportunities. Here’s how business operations work in various sectors:

Ecommerce

Ecommerce businesses sell products or services online through websites, marketplaces, or social media platforms. 

Key operations include: 

• Inventory management: Online stores need efficient systems to track stock levels, predict demand, and prevent overstock or stockouts. Automated inventory tools can integrate with your sales platforms to update quantities in real time.
• Order fulfillment: Build streamlined processes for picking, packing, and shipping to ensure timely delivery. Partner with reliable logistics providers or use fulfillment centers to enhance efficiency.
• Customer support: Address inquiries quickly through chat, email, and social media to improve customer satisfaction.
• Website maintenance: Update your site regularly to ensure it runs smoothly. Check website speed, security, and user experience to optimize conversions and reduce cart abandonment.

Retail

Retail involves in-person transactions at physical stores, pop-up shops, or markets.

Key operations include:

• Merchandising: Create effective display and product placement strategies to maximize sales in your physical store.
• POS systems: Use robust systems that handle inventory tracking, customer data collection, and sales reporting.
• Store management: Handle everything from merchandising and staffing to regional events and promotions—all tasks needed to serve customers well. 
• Staffing: Schedule and train employees to handle peak shopping times while maintaining excellent customer service.
• Location management: Choose store locations in high-traffic areas to maximize revenue while reducing advertising costs.

Consider combining in-store and online experiences through features like “buy online, pickup in-store” (BOPIS). Regularly assess and optimize your store layout based on customer movement patterns.

Manufacturing

Manufacturing involves creating products from raw materials. Manufacturers might sell directly to customers or to other businesses which then sell to end users.

Key operations include:

• Supply chain management: Work closely with suppliers to maintain a steady flow of raw materials for your production schedule.
• Production: Use lean manufacturing principles to minimize waste and optimize efficiency.
• Quality control: Maintain strict quality standards to reduce defects and customer complaints.
• Maintenance: Keep equipment in top condition to minimize downtime and ensure consistent output.

Wholesale

Selling wholesale involves selling bulk quantities at discount prices to businesses that then sell individual items to customers at a markup.

Key operations include: 

• Ware house management: Create efficient systems for storing, organizing, and retrieving bulk goods while prioritizing safety and compliance.
• Inventory management: Keep optimal stock levels to meet customer demand while minimizing storage costs. Track stock turnover and forecast trends to prevent overstock or shortages.
• Order processing: Ensure accurate handling of bulk orders, including picking, packing, and shipping. Consider automated systems to streamline this process.
• Supplie rrelationships: Build strong relationships with suppliers to negotiate better terms, ensure reliable supply, and adapt to demand changes.
• Pricing strategy: Develop competitive pricing that accounts for volume discounts, market trends, and customer needs.
• Logistics and distribution: Manage warehousing and shipping networks to deliver products quickly and cost-effectively.

Dropshipping

In dropshipping, businesses sell products to customers but outsource fulfillment to suppliers. This model is common in print-on-demand businesses.

Key operations include: 

• Supplier relationships: Partner with reliable suppliers who maintain product quality and ship orders promptly.
• Product selection: Choose profitable products that balance niche appeal with market demand. Update your product catalog regularly to keep customers engaged.
• Order management: Automate order processing between your store and suppliers to minimize manual work.
• Marketing and customer acquisition: Focus on effective strategies like social media advertising, SEO, and influencer partnerships to drive traffic to your store.