Let’s not beat about the bush. You might think you’re smarter than the rest but your business is probably losing money as you are reading this.
Business owners understand the importance of maintaining a profitable bottom line. This is especially important when you’re a small/medium business. To keep doors open, you’ve got to be sure you don’t ever have a “leaky bucket situation”.
A SmallBizTrends study recently found that 30% of companies surveyed are continually losing money, with another 30% only breaking even. As a merchant, you need to know how to maximise every penny.
Before you start arguing that your business is fine and you would never be in that situation, go through these four ways businesses lose money without even knowing.
How many of these apply to you?
1. No process: Business moves fast. In order to satisfy your customers, you need to be pretty sharp and agile whilst delivering the best quality. When a company does not have an efficient process in place, it cannot keep up with digital transformation and market trends. When your process is lacking or hasn’t been updated since the 90s, you are losing money. From price differences between purchase orders and invoices to fraud – without transparency, blackholes appear. Say you’ve negotiated great prices with your suppliers. Maybe even used a great consultancy to do it. But how do you maintain control? How do you make sure those prices are consistently low and the right suppliers are used across the business? Process. Make sure everyone knows the steps to follow and knows the importance of following the right steps.
2. Old tech: Let me paint a picture for you here – SAP was founded in 1974 and every “new” update Oracle bring out was created before the very first iPhone. That’s right. Holding on to old technology in a time of intense progress is down right stupid. Remember the tracking of rates from above? Tech gives you that control. B2B technology is fast catching up with the power and simplicity of B2C tech. The UX is there, the security is there. Why aren’t you? You must remember technology is never the end goal. It is the means to empower your people and your business work smarter and grow faster.
3. Employee training and turnover: Your business may not be heavily staffed, but you can still save money by effectively training and reducing turnover. The generation coming into work now is not a paper generation. It is a digitally native generation who will perform at their best on tools that are in line with what they use in their personal lives. Great tools, effective training and sustained engagement will get you valuable staff. Employee turnover is costly. Human Capitalist found that employee turnover costs three times that person’s salary.
4.Poor customer service: A dissatisfied customer will tell between 9 and 15 people about their experience. Another 13% of unhappy clients tell another 20 people. The ripple-effect from a poor customer service experience will hurt your bottom line. Focusing on customer needs starts from within. You must make sure you have all three: the right price, the right process and the right people.
Time to work smarter?
So you think your business might be losing money? Then do something about it. Look for a solution that can actually show you if you are or not. Stopping the “leaky bucket” is NOT the hardest thing in the world. The hardest thing in the world is identifying if you have a problem then taking the first step towards dealing with it.
At the end of the day, there is only one choice:
Be smart and work smarter.