No one likes losing money, especially if you’re a small business owner, freelancer or tradie. Check out these five ideas to see if you can improve your profitability.
1. Get organised
Time is money, and there is no bigger drain on your time than being disorganised. It’s worth investing a little time upfront to develop systems and processes in your business that will save you substantial time and help prevent you from losing money in the long run. Some ideas include document templates for paperwork, consistent guidelines for subcontractors to follow, spreadsheets to track expenses, systems to capture receipts (even if it’s a different shoebox for each month).
2. Amazing customer service
Sometimes losing a customer is unavoidable, but losing a customer because of poor service can always be avoided. Receptionists and sales staff are often among the lowest paid employees on a payroll, but they are also most responsible for your business’ relationship with its potential or current customers. Pay close attention to the quality of your customer service. There are a number of ways to do this: record customer calls, clearly outline service expectations, and have frequent discussions with staff on ways to improve their sales skills and selling techniques. Work out which staff member achieves the highest sales and observe how they do it. Train the rest of your staff to emulate that behaviour. Any of these ideas could do wonders for your customer retention and hopefully improve your sales too.
3. 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 doesn’t work on a mobile, or poor social media management and splurging cash on expensive advertising slots, will drain resources and potentially send customers to your competitors.
Seek professional assistance and use online resources like this blog, or books, to learn how marketing can help transform your business. Some marketing tactics are very simple to implement, like letterbox drops, loyalty programs and Google Adwords.
4. Invest in your staff
If your business is losing money it may seem odd to consider spending more, but long-term benefits can outweigh short-term costs. Paying more for better qualified staff, investing in employee training, and paying for a comprehensive recruitment process using a professional resource can drastically improve the quality and productivity of your workforce.
Then continue investing in upskilling your team, to keep employee turnover to a minimum. The cost of hiring and training new staff is usually significantly more expensive than the cost of providing the benefits and support to the ones you already have, and encouraging them to stay.
5. Get the price right
Over-charging for your products or services will drive customers away, while undercharging can drain profits. There are a range of pricing strategies, depending whether you set prices based on cost, the value to the customer, or relative to the prices charged by your competition.
However, consider setting prices linked directly to the quality of your work. If you have a better quality product, you should be charging more than your lower quality competition.
Making a profit is key to your business survival, no matter what the size of your business. By getting the basics right you can ensure your business survives and thrives.
If you need help with business finance, contact Prospa on 1300 882 867 about a small business loan that matches your needs.