Nobody would like to believe that their small business is losing more money than it needs to be, but this is the case for many small businesses out there. Losing money can mean a downward spiral and eventually closing if it isn’t stopped as soon as possible. If you suspect yours could be losing money or you just want to make sure that it isn’t, read on for what you need to keep an eye on:
Bad Budgeting Skills
If you don’t have a business budget, you’re already losing a ton of money. Being frugal as a small business is essential, even if you’re doing well. You need to be smart about purchases. Many large businesses were making a ton of money and still stuck to budget and didn’t run out and buy fancy computers or spinning chairs. Make sure you know your numbers inside and out, and be aware of how much you have to spend on certain aspects of the business.
Employee Training And Turnover
Training for your employees is a worthwhile investment. It might seem like a big expense at first, but it will help you to reduce mistakes. Also, investing in your employees like this shows that you care, alongside treating them right. This will help in reducing turnover, which is also a must. A high turnover costs 3 times an employee’s salary. Keeping your staff trained and loyal is imperative to keeping your business in profit – not to mention with a good reputation.
If your account is all over the place, you may end up spending more than you need to spend somewhere down the line. Having a dedicated accountant will help you to stop this, but you need to do your part to record purchases and keep receipts, too.
Too Much Downtime
Experiencing too much business downtime is really going to annoy your customers. Keeping your business online and running smoothly as your 24/7 storefront is a must. A tech company like Mustard IT can minimize downtime, and it’s worth it when you look at the stats. Unplanned downtime costs small businesses thousands upon thousands each year.
Poorly Priced Products
Maybe your products aren’t priced as they should be. If they are too expensive, nobody is going to buy them from you. If they are too cheap, more people will buy, but you won’t be making the profit that you could be making. Market analysis will help you to figure out what your products should be priced at.
Using Outdated Tech
If you’re using outdated tech, you could be hurting your bottom line. You need to make sure your tech can meet customer demand. For instance, and outdated point of sale system could be holding you back and stopping customers from coming back to you.
Your small business could be losing money for any number of reasons. The above are some of the most common, so take a look at what you’re doing now and see if anything rings true.