In the work of any business or project, there is a stage that inhibits other processes. It is called a bottleneck or bottleneck, which means "bottle neck". The neck is the bottleneck that controls the rate and volume of fluid leaking. Also, bottlenecks in business at a certain stage limit work flows due to lack of opportunities or imperfect management decisions. Therefore, time and resources, efficiency and profitability are wasted. Igor Pakulets, general director of the consulting company InBridge Consulting, told how to find a bottleneck in the work of a business and turn a weak point into a powerful point of growth.

Based on materials from an interview with Login Casino UA (New Year's printed special issue of the magazine)

Do you have to look for bottlenecks when working with clients?
Searching for bottlenecks, their causes and consequences, providing projects with management decisions in order to avoid and eliminate, changing the nature and magnitude of the impact, changing the consequences of the bottleneck, distributing the bottleneck or preserving it due to awareness are the main tasks of InBridge Consulting and the subject of its activities.

How do bottlenecks affect company operations?
Bottlenecks have an extremely negative impact on the company's operations, just like chronic human diseases in medicine. They are the results of ineffective management decisions.
Examples of major bottlenecks that create a further chain of bottlenecks include:
the lack of a Mission in the company as the main vector of development, which serves as the basis for the implementation of the main goals of management;
the company's lack of a Vision, as a representation of the content of activities and future prospects;
lack of certain corporate values, goals and strategies;
low quality or lack of management accounting;
formal use of such a tool as budgeting;
lack of processes for consolidating the results of the owner's business;
construction of an automated accounting system based on modern systems without high-quality content;
lack of diversification of distribution channels, etc.
The impact of bottlenecks on a company is different depending on their duration and origins.

Which bottlenecks in business processes pose the greatest danger?
Depending on the spheres of activity of the company, bottlenecks can be divided into the following groups according to the sources of origin:
strategic - the mission of the company, which is not shared by the employees;
financial - there is no break-even analysis of an individual SKU;
tax - deficit of the limit for registration of tax invoices;
security - the risk of raider takeover of the company;
personnel - high staff turnover;
accounting - the choice of the discount rate for long-term debt.
Security-related bottlenecks pose the greatest danger in the company's business processes, since the speed of their negative impact on the company's activities is the highest, and the volume is the greatest. To control them, it is necessary to develop and implement a company's security policy, as well as identify business threats and develop their risks.

At what stages do problems most often arise that hinder the further work of the company in general?
At each stage of the company's activity, its own problems inherent to this stage arise:
when creating a company, this is the choice of the company's mission, vision, form of ownership, taxation system; development of management accounting rules and reporting consolidation procedure (P&L, CF); choice of a working capital management system; building a financial model; clear KPI approval;
at the growth stage, this is the construction of a clear organizational structure, the decentralization of management systems, the use of innovative approaches to doing business;
at the stage of maturity - this is the introduction of an effective budgeting system, reducing the share of bureaucratization in the management system, completing the process of product diversification in the market;
in a downturn, it is the development of a new mission, vision, strategy, and a decrease in the centralization of the management system.
Each stage of a company's activity or business process potentially contains problems that are necessary to solve them.

Is it possible to pre-define a bottleneck in a business?
So it is possible. It all depends on the type of business. Each business has its own bottleneck. For example, the main bottlenecks of the hotel and restaurant (similar in structure to a land-based casino) business are:
selection and installation of the star category of the hotel;
the influence of other accommodation establishments on the loading of the hotel, in particular, hostels, apartments with daily rent, etc .;
the impact of anti-epidemic measures in connection with the spread of COVID-19;
distribution of overhead costs between a hotel, restaurant, "A la Carte" to determine the effectiveness of each direction, determine the break-even point, calculate discounts, plan promotions;
reduction of the share of fixed costs in the hotel's activities.
Let's go over the last point in more detail. Yes, the more the hotel or the same casino is loaded, the more its income. If the costs are variable in nature, for example, gas, electricity, water, staff salaries, then covering these costs does not require additional financing from the owner or financial institution. If the expenses are of a permanent nature, then no matter how many guests are accommodated in a hotel or casino, the amount of expenses does not change. And with a small number of guests, such costs are threatening, because income may not cover them. Effective management decisions are able to translate fixed costs into variable ones, which means they can affect the financial condition of the company.

How do you conduct analysis to identify customer bottlenecks?
The main tools that InBridge Consulting uses to identify bottlenecks are financial diagnostics of the company, analysis and optimization of business processes, and building financial models.
Financial diagnostics are based on the analysis of liquidity, business activity, financial stability and efficiency of the company. More than 150 indicators, their trends, compliance with optimal values ​​are analyzed. A study of the interaction of operational and financial leverage is carried out, in the course of which the multiplier effect of the break-even state is calculated. The target profit analysis is analyzed, the effect on profit of changes in one of the elements of the operating leverage is assessed: prices, variable or fixed costs, as well as other studies are carried out.
The construction of a model of the company's activity is carried out using complex mathematical programs, the result of which is an equation that looks like:
Y = X1 + X2 + X3 +… + Xn,
where, for example, for a business hosting guests, Y is operating profit, X1 is hotel (casino) occupancy, X2 is room (hall) occupancy rate, X3 is electricity consumption, Xn are other indicators.
This mathematical model allows you to find a bottleneck and plan measures to influence it. In addition, the model constructed in this way is a powerful forecasting tool. Using linear programming methods, the optimal values ​​of the indicators are calculated, i.e. the upper and lower boundaries of the bottleneck.

If a company constantly encounters the same botneck in its work, what does this indicate?
This may be indicative of medical terminology for misdiagnosis and treatment. Quite often, bottlenecks are small things that are always in front of your eyes, but no one pays attention to them.

What can the wrong identification of weaknesses in business lead to?
Failure to identify weaknesses correctly can lead to business loss in the worst case.

Is it always possible to eliminate bottleneck or are there some that cannot be eliminated?
It is not always possible to eliminate the bottleneck, however, it is necessary to take maximum measures to change its nature and magnitude of the impact, and change the consequences. Consistency and complexity on this issue brings the effect of eliminating or reducing the influence of a bottleneck closer.

Can a business run smoothly without focusing on finding and eliminating bottlenecks?
Stable business operation without finding and eliminating bottlenecks is impossible. Methodological work on them will allow the company to gain additional competitive advantages in business.