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