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5 ways to stop your business from losing money

No one likes losing money, especially if you’re a small business owner.

Check out these five tips to improve your profitability.

1. Get organised

Time is money, and there’s no bigger drain on your time than being disorganised. By investing a few hours into developing systems and processes for your business, you’ll save substantial time and avoid losing money in the long run.

Ideas include document templates for paperwork, consistent guidelines for subcontractors, spreadsheets to track expenses and a system to capture receipts (even if it’s a different shoebox for each month).

2. Provide amazing customer service

Losing customers over time is unavoidable, but losing customers because of poor service is always avoidable. Receptionists and sales staff are among the lowest-paid employees in any small business, but they are also responsible for your relationships with customers.

Pay close attention to the quality of your customer service. Consider recording customer calls, clearly outlining service expectations and having frequent discussions with staff about ways to improve their sales skills and customer approach. Work out which staff member achieves the highest sales, then train the rest of your staff to emulate that behaviour.

3. Implement effective marketing

Other than word-of-mouth, the ability to attract new customers depends solely on the success of your marketing. A drab website that isn’t optimised for mobile, poor social media management or splurging on expensive advertising slots can drain resources and turn off customers.

Seek professional assistance and use online resources like blogs to learn how marketing can transform your business. Traditional marketing tactics – like loyalty programs and letterbox drops – are very simple to implement, but equally important are online strategies like publishing quality content and having a strong social media presence.

4. Invest in your staff

If your business is losing money, it may seem counter intuitive to spend more. However, the long-term benefits can outweigh short-term costs. Paying more for better-qualified staff, investing in employee training and paying for a professional recruitment resource can drastically improve the quality and productivity of your workforce.

But don’t stop there. Continue investing in upskilling your team to keep employee turnover low. The cost of hiring and training new staff is significantly more expensive than providing benefits and support to current employees.

5. Get the price right

Overcharging for your products or services will drive customers away, while undercharging will drain profits.

Pricing strategies range from setting prices based on cost to how much your competition charges. However, consider setting prices that align with the quality of your work. If you provide a better-quality product or service, you can afford to charge more than a cheaper, lower-quality competitor.

Key takeaway

Making a profit is key to small business survival. By getting the basics right, you can ensure your business not only survives but thrives.

If you need help with business finance, contact Prospa on 1300 882 867 about a small business loan that matches your needs.

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The information in this post is provided for general information only and does not take into account your personal situation. Nothing contained in this post constitutes advice or an endorsement or recommendation of any kind by Prospa. Any links to third party websites are strictly for informational purposes only. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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