“One of the best ways to maximize the profits of your business,” says Tech.Co, “is to cut down on the amount of money you lose.”
Even if you have an awesome product or service that sells like gangbusters, your losses will still affect your bottom line. But when you start identifying your areas of loss, you’ll be able to find solutions to “stop the bleeding” and start maximizing your profits now, and in the future.
Tech.Co suggests that you evaluate the following five ways that your business may be losing money, pointing out that, “The solutions to these problems will go a long way toward the success of your business.”
Employee Training / Turnover
According to Chron, the estimated cost of a lost employee earning $8 per hour is $3,500 to $25,000, resulting from hiring expenses and training labor, plus lost sales and productivity. Depending on the industry and the employee’s position, the revenue impact can be much steeper.
Is your business spending a lot of money to hire and train new employees? If so, start paying more attention to your hiring process. Take more time to find the right applicant. If you’re not getting “good vibes” from the first five applicants, Tech.Co suggests interviewing five more. When you hire new employees, train them as thoroughly as possible so they have the skills and confidence to succeed. Try to find people who are a good fit for your company culture and are enthusiastic about staying at your company long-term.
Having a steady team of staff members will increase morale and productivity in your workplace. Additionally, it will improve the way your customers view your brand when they see consistency in your employees as well as other aspects of your company (plus, they’ll enjoy seeing friendly, familiar faces when they come to your business).
Business processes ensure the smooth operation of any organization. However, if your company has even one bad process, it can affect your overall profitability and hinder your ability to accomplish your goals. If you have an out of date inventory management system, for example, you run the risk of losing money from overages and shrinkage. Inefficient processes can result in frustrated employees, missed deadlines, non-compliance, lost opportunities, and upset customers, all of which can increase costs to the business.
Start evaluating your processes to see what’s holding you back. If you’re spending a lot of time entering data in multiple software systems, upgrade your POS system to one that uses a single database. This way, you’ll only enter data once and everything will automatically sync across your online/offline stores and Point of Sale. With administrative functions running at peak efficiency, you’ll have more time to focus on growing your business.
Once you identify and fix the inefficiencies in your processes, you’ll notice a decrease in monetary losses.
“Nurturing relationships with your customers is a crucial part of growing a successful business,” says Kissmetrics. “At any moment, an unhappy customer can share their opinion with the masses through social media and the web and negatively affect your business.”
That’s why it’s more important than ever to respond as soon as possible to customer inquiries, concerns, and complaints. If you wait too long to follow up with a customer, they may be tempted to move on. Statistics show that as many as 89% of consumers began doing business with a competitor following a poor customer experience (Source: Kissmetrics).
If you consider that most businesses are failing when it comes to the customer experience, it only makes sense to “swoop in and enchant those same customers into falling for your company,” as Kissmetrics puts it. Solidifying your relationship with your customers through quick and friendly follow-ups will go a long way in driving customers to your business and increasing revenue.
Forgetting That Customers are People
If you’ve forgotten that customers are worth more than just a sale, you risk losing their business. That’s because they want to know that you care about them as people, too. Customers will remember the business owner that sends them a “Thank You” note after they make a purchase or the small gift the business remembers to send for their birthday.
Recognize the value of your current customers, evaluate customer relationships, and look for ways to improve them. It may take a little extra effort, but it will pay off in the long run because repeat customers typically bring in more revenue than acquiring new ones.
Many businesses continue to stick with the same traditional advertising methods they have always used instead of taking advantage of online marketing and social media. Surprisingly, some businesses still don’t even have a website!
“You have to stay up to date with the times,” says Tech.Co. If you continue to rely on outdated marketing techniques, you could fall way behind competitors that have adopted newer strategies more in keeping with modern retailing. This could cause you to lose market share as result.
Start building your online presence with an attractive, informative, and easy-to-navigate website. If you already have a website, make sure it loads quickly and is focused on the user experience. Additionally, you’ll want to make sure it’s built on a responsive platform so it’s mobile friendly. Additionally, getting involved with social media will help you engage with your customers and gain valuable insights that can help you adjust your marketing strategy.
Online marketing is an important part of building brand awareness, connecting with consumers, and driving traffic—and revenue—to both your online store and your brick and mortar establishment.
Identifying your areas of loss will make you a more successful business owner, suggests Tech.Co. It presents you with the opportunity to find innovative ways to stop bleeding money and significantly increase your earnings from the business.