If you want to make sure that your achieving the best success possible, you’ll want to learn whether your business is losing money and what to do about it. Read on for this helpful guide!
It’s safe to say that sometimes, it’s the small things that end up eating away at your business profits. Before you know it, your business may be in a position where it just can’t survive.
The only way around this would be for you to consistently generate a profit.
Many small businesses have a hard time doing this though. Sometimes, there are pesky things that can eat right into your income without you even realizing it.
The losses may start out small. But in the end, you may find that you end up missing out on a way bigger chunk than what you first thought.
No worries I’m here to help! As you might know, I started my career working in New York’s top ad and marketing agencies – rising up quickly to Senior VP.
But then I quit in my late twenties to pursue becoming a (hoped for) bestselling author. Plus I wanted to help people – in a more personal way – as a branding and marketing consultant. Thankfully, my career plan/dream worked out! Now I love to help people in their various entrepreneurial ventures.
With this in mind, I created this guide for how to find out why your business is losing income and how to fix it.
It’s vital that you identify why your business is not making money.
The faster you can find out where your loss is coming from, the faster you can then reduce or even stop the leak. Find out more below.
If you want your business to have any chance of success, then you need to know your numbers. If you don’t then you may not know how much money you are actually spending on your expenses. When you run a business, you can’t risk being unorganized. You also can’t risk your accounting being inaccurate either. If you are very slow to log transactions, then you won’t have a good idea of how much money you have. I
f you buy a lot of supplies but don’t enter the transactions into your books then you may think that you have more money than you actually do. As you continue to spend, you may find that this presents itself as negative cash flow for your company. Accurately recording your transactions is important.
Small errors, such as mixing up numbers or even recording items in the wrong spot can easily devastate your business. You can avoid errors like this if you take the time to reconcile your accounts. You also need to carry out internal audits, or use a professional accountant. They can help you with your business records.
If your website is poor, then this will be working against you. If you have an eCommerce site, then sometimes you may find that you are paying more in fees than you are selling products. If this is the case, then you need to make a serious change.
You have to make sure that you put in the work to adapt your pages so that your users can find what they need quickly, and you also need to make sure that you are implementing the right scripts as well. If you can do this, and if you can have everything working well behind the scenes then this will translate to a much better customer experience overall.
If you want some help with your online site, then you need to try and invest in people who can provide you with in-house expertise for ecommerce. If you can do this, you will be able to get the best result out of your online site while also ensuring that you are actually making money from the products that you are trying to sell.
Decisions like this can save your business from freefalling, so make sure that you put in the work to hire someone who you can trust, and then outsource anything you need along the way.
Whatever you do, you have to make sure that you do not use a combined account for your business banking and your personal banking. Open up a separate bank account if you can. Even if you are a sole proprietor, you have to think about having two separate accounts if you can. When you share a bank with your business, you may find that it is very easy for it to become muddled.
How can you know what belongs to you, and what money belongs to your business when everything is combined? If you have one account, you may find that you end up making a withdrawal if you experience a personal emergency.
If you use money that actually belongs to your business, then before you know it, you will be losing your company money because you did not take the time to split your finances properly.
It is so important that you take the time to learn how to price your products properly. If you sell your products for too little, or even too much, then you will certainly lose out on money. If you set your prices too high, then fewer customers will buy from you.
People may even view your products as being completely unaffordable and this will cause them to seek out options elsewhere.
If you set your prices too low then a lot of customers will buy from you, but you may find it hard to turn a profit. People may also be willing to pay more than your lowest price.
Creating a price for your product can be hard but it is certainly not impossible. Do some market research and find out what kind of customers you have. You then need to study your competition so you can find out what they charge for the exact same product. You can also ask your customers how much they would be willing to pay for such products.
At some point, your business will not be able to grow, unless you invest in it. You may find that your operation stagnates and that you don’t have enough money to expand. You may not be able to offer more products or even market to your customers. The only way for you to truly gain more profit would be for you to invest in your business.
If you do not invest, then your business will miss out on your true earning potential, and this is the last thing that you need. You do have a lot of options when it comes to your business. You can invest your personal money, or you can ask your family and friends.
You can also take out a bank loan. When you invest your money, you have to invest it wisely. Work on any incentives and help your business to grow so you do not end up wasting money when you just don’t need to.
In this day and age, you have to understand that nearly everyone is online. If someone wants to find a new business to buy from, where do you think they will go? Online of course. If your business cannot be found anywhere, then you are missing out on a lot of customers. That is why small companies need to have a website.
Even if you do not sell products online, a site can help people to learn all about your physical business. Your site can also help people to find out how to contact you or even where your physical location is. You shouldn’t stop there, either. You should be trying to create social media pages. These pages should also be updated on a regular basis. If you can do this, then you will find it easier to engage with customers as well as finding it easier to show off your products.
Do your bit to encourage customers to leave a review on your site or even on social media. When potential customers review you, they will think better of you and your company. If you can claim your company on Google then this is always a very good thing to do, so keep that in mind.
Bring me in as business-boosting branding and marketing consultant.