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5 Ways Your Business is Losing Money and How You Can Fix It

May 17, 2015

2:00 pm

One of the best ways to maximize the profits of your business is to cut down on the amount of money you lose. You might sell a good product or service, but your losses still cut into your overall profits. When you identify these large areas of loss, you can find ways to stop the bleeding and increase your earnings from the business.

Identifying your areas of loss will also make you a better business owner. You’ll figure out how to maximize your profits today, and you’ll also learn how to increase your profits years down the road. Consider these five ways that your business may be losing money. The solutions to these problems will go a long way toward the success of your business.

Employee Training and Turnover

Your business likely spends a lot of money to hire and train new employees. You want to find people who will stay at your company for as long as possible. A consistent staff makes a big difference in the productivity of your workplace as well as your image in the eyes of customers. People enjoy seeing a friendly and familiar face when they enter a business.

You can fix this with several steps. Pay more attention to your hiring process. Take a bit longer to find the right applicant. If you don’t get good vibes from the first five applicants, interview five more. Train your employees as thoroughly as possible when you first hire them. They’ll learn enough on their own after a certain amount of time on the job.

Inefficient Processes

Inefficient processes cost your business a lot of money. You must find your best customers as quickly as possible. Your marketing and advertising efforts cost money, so you need to find a return on your investments as soon as possible. It could be one employee or an entire process that slows down your profits. Once you fix the inefficiencies, you’ll notice your monetary losses will decrease.

Workflow helps you keep your business processes more efficient. You’ll be able to target the customers you need to speak with the most. Warm leads will be given more attention due to the sophistication of your new business processes. You’ll spend less time talking to prospects and leads that won’t pan out for you. And your efforts will be more organized thanks to workflow. Better organization always leads to better productivity.

Following Up Too Late

When a customer sends an inquiry to you, you must respond as soon as possible to increase your chances of success. If you can’t take the phone call right now, pick a time to call the customer back. And make sure you stick to that time. It could make the difference between closing a sale and losing a sale.

You can speed up the time it takes to respond with workflow. Email responses should be personal, fast, and free from spelling and grammar mistakes. Workflow will help you send emails out to customers in a rapid manner. You’ll never miss another chance to make a sale after following up with a customer.

Forgetting Customers are People

It’s easy to forget that customers are worth more than just a sale. They want to know that business owners care about them as people. The little things matter. Customers will always remember the business owner that sent a small gift for their birthday or took them out to lunch once in a while. These business owners stand out in a good way.

Process management technology can help you achieve this important step in customer retention. You can enter important data about your customers in a CRM system for later reference. You’ll get reminders at least a week in advance of birthdays and holidays. You’ll be able to reach out to your customers in ways that other businesses lack. Your business will stop losing money once you start remembering your customers are people.

Outdated Marketing Campaigns

If the marketing campaigns are living in the 1990s, then so are your customers. You have to stay up to date with the times. Don’t try beating people over the head with corny catchphrases. Nobody responds to that type of advertising anymore. Direct marketing campaigns are now much more nuanced compared to the past.

Workflow can help you update your marketing campaigns to appeal to modern customers. You’ll still need to check for spelling errors and improper wording. But you’ll find better layouts and improved communication with customers that will buy your products and services. It’s time to stop wasting money on boring marketing campaigns.

 

Image Credit: Ryan McGuire

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Alex Espenson is a recently retired business owner turned consultant, with a passion for entrepreneurism and marketing. When he isn't writing or consulting, you can usually find him out on the river with his fly rod, or hiking in the hills near his home in Boulder Colorado.

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