With economies of scale, small businesses face an inherent uphill battle. To compete with large, well-oiled machines of mass production, these humbler entities need to leverage every advantage they can get.

One key area where small businesses can get a nice leg up over their larger counterparts is through operational efficiency. Whereas big businesses often find themselves tangled in burdensome manual processes that cause operational costs to soar, smaller businesses have the advantage of running lean and mean.

What many small companies in the industrial world fail to realize, though, is that the Internet of Things can play a major role in further boosting their operational advantages.

The Wrong Focus

Because the IoT is relatively new, companies of all sizes are still learning about the countless ways it can be applied.

The universal message business leaders hear is something along the lines of how IoT data will change the world. While this is undoubtedly true, the common examples we see in popular culture tend to be consumer-focused, highlighting how companies can gain competitive edge by building better, smarter, more efficient products.

Though these examples certainly resonate with large, scaled-out businesses that can capitalize on mass production, it’s difficult for smaller companies to justify hefty investment in IoT technology just so they can offer slightly more efficient products to consumers.

Small businesses are constantly looking at cash flows, searching for ways to trim the fat and cut costs. It’s time for them to see how connected technology can contribute to those goals.

Here are three main ways the IoT can help boost a small company’s operational efficiency:

1. Improve the Manufacturing Process

Small businesses typically can’t make substantial capital investments in manufacturing equipment. Therefore, the equipment they do have must operate efficiently with very minimal downtime. IoT sensors can monitor the entire supply chain while optimizing equipment operations and proactively diagnosing maintenance issues before they occur.

Harley-Davidson, for example, uses the IoT to manufacture a motorcycle every 86 seconds. Sensors throughout the company’s production facility feed data to a centralized management system that automatically adjusts equipment when certain parameters are breached. This keeps the production process running smoothly and consistently.

Unexpected machinery breakdowns (and the resulting downtime) can be a killer for small businesses, but they can be easily avoided with an investment in IoT technology.

2. Relieve the Human Burden

Automation is by far the most useful aspect of IoT, making mundane manual tasks more efficient without eliminating jobs. Rather than asking highly skilled employees to conduct menial, time-consuming chores every single day, small businesses can instead automate select manual processes to allow their experts to focus on high-level endeavors.

Just recently, a company visited my office to service our first-aid kits. Its employees had to manually check each item to determine consumption levels and then enter information into a handheld device to check the truck’s inventory. The whole process took hours.

If these kits were IoT-enabled, the company would know ahead of time which supplies were low. Inventory would be easily optimized, and call time would be reduced significantly.

3. Save on Utilities

Utility bills can put a major strain on a small business’s bottom line, but it doesn’t have to be this way. IoT technology can turn any office into a smart workplace and drastically lower its energy consumption.

Embracing smart thermostats that avoid heating and cooling seldom-used rooms and installing motion-detected lighting could make a world of difference. The city of Lansing, Michigan, for example, reduced its lighting costs by 70 percent just by installing motion-sensor lights and energy-efficient bulbs throughout its streets.

Despite popular culture’s depiction of the IoT, more than just multinational corporations can benefit from this technology. Though the initial investment may be daunting for small businesses, it’s important to focus on the long-term benefits of top-tier operational efficiency.

Small businesses in crowded economies of scale ought to look inward for their competitive advantages. The IoT can help trim costs, maximize output, and provide a much-needed edge that helps companies thrive into the future.