How to find the bottleneck that is capping your growth

Key takeaways

To find bottlenecks in a business, follow one piece of work from enquiry to payment and look for where it waits longest. The step with the biggest queue in front of it sets the pace for everything else. Adding capacity anywhere other than that step increases cost without increasing output.

• The bottleneck is the step with the longest queue in front of it.
• Only one step limits output at any time.
• Capacity added elsewhere raises cost, not throughput.
• In small firms the bottleneck is often a person, commonly the owner.

What is a bottleneck in a business?

A bottleneck is the step in a process with the least capacity relative to the demand placed on it. Because work cannot pass through faster than its slowest step, the bottleneck determines how much the whole business can deliver. Everything before it builds a queue, and everything after it waits.

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• Growth stalled? When operations are the bottleneck

How do you find the bottleneck?

Find the bottleneck by measuring waiting time, not working time. Take ten recent jobs and record when each step started and finished. The step where work sat untouched for longest is the constraint. A quicker check is to ask where the piles are: unanswered emails, unsent quotes, unapproved drafts or unraised invoices.

• 1. List the steps from enquiry to cash.
• 2. Time ten recent jobs through each step.
• 3. Separate working time from waiting time.
• 4. Find the step with the longest wait.
• 5. Ask why that step is short of capacity.

• How to measure team capacity before you outsource

What causes bottlenecks in small businesses?

Most bottlenecks in small businesses have one of four causes: a single person who must approve or do the step, a skill only one or two people have, a system that forces manual work, or a policy such as batching invoices monthly. The owner's inbox is the most common example of the first.

• Approval: everything waits for one person.
• Skill: only one person can do it.
• System: re-keying, spreadsheets, no integration.
• Policy: batching, cut-offs, sign-off rules.

• Key person dependency: when one person holds it all

How do you fix a bottleneck without hiring?

Fix a bottleneck in this order: stop wasting its time, move work away from it, then add capacity to it. Take routine tasks off the constrained person, simplify approvals, and hand the repeatable part of the step to a managed team. Hire only if the remaining work is specialist and fills a role.

• Protect: remove interruptions and non-essential tasks.
• Offload: move the routine share of the step elsewhere.
• Simplify: cut approvals for low-risk cases.
• Add: bring in trained capacity for what remains.

• Overflow outsourcing: hand off only work above your limit
• Cross-training a small team: more cover without hiring

What happens after you fix it?

The bottleneck moves. Once the slowest step is relieved, another becomes the constraint, often the next one downstream. That is normal and a sign of progress. Repeat the exercise each quarter, and expect the constraint to move from admin to delivery to sales as the business grows.

• The weekly operations review that keeps a lean team on track

When is the bottleneck outside operations?

Sometimes the constraint is not capacity at all. If there are no queues anywhere and the team has spare time, the limit is demand, pricing or the offer. Adding operational capacity then is wasted money. Check lead flow and conversion before concluding that the business needs more hands.

• When not to outsource

What does this look like in practice?

A pattern we see in UK trades and service firms: the owner believes the limit is engineers, and plans to recruit two. Timing ten jobs shows quotes waiting four days for the owner to price them, and a third of enquiries going elsewhere in the meantime. The constraint was quoting, and the fix was a pricing guide and someone to prepare drafts.

• See client work
• BPO Solutions for UK businesses

Bottleneck checklist

Repeat this every quarter.

• Map the steps from enquiry to payment.
• Record waiting time at each step for ten jobs.
• Identify the longest wait and its cause.
• List tasks the constrained person could stop doing.
• Decide what part of the step is routine.
• Move the routine part and measure again.
• Look for the next constraint.

• The business scalability scorecard: can you grow lean?
• A 90-day plan to scale without adding headcount

Next step

Tell us your steps from enquiry to payment and where you think work waits. We will help you confirm the constraint and the cheapest way to relieve it.