Every business in the World lives and dies based on their bottom line and whilst searching for sales and growth is vitally important in this tough world, so too is watching the spends. Far too many people ignore to focus on where their business is spending money and often business owners will be simultaneously looking for growth whilst their business hemorrhages money that can be easily prevented. If you run a business, small or large, then here are some areas that you could address in order to prevent your business from leaking money.
Marketing
The World has changed thanks to the internet and that includes marketing, there are now new ways of marketing that are more successful and more cost-effective than traditional methods. The ROI on social media campaigns and SEO marketing far outweigh radio and newspaper ads and if your business still has one foot in the marketing past then it is time to drag it into the present.
Chargebacks
Chargebacks account for a huge loss to many businesses and they often go criminally ignored. Whether it be as a result of a stolen credit card or the dispute of a charge, there are ways and means that your business can avoid and deal with chargebacks, they are not the “cost of doing business”. The cost of chargebacks to a business will eat away at the bottom line and experts suggest that for every $100 of chargebacks, your business will pay around $308 in processing fees, penalties and wasted time, not to mention the lost goods and services. Don’t accept this, be aggressive and get on top of it.
Suppliers
Whilst loyalty is key, this is business and even if you have had the same supplier for 20 years, that doesn’t mean that you should pay a higher price, just because of history. No matter what products your business receives, you should be constantly reviewing your suppliers and seeking out new ones to ensure that you are getting the lowest and fairest price for your goods.
Organization
Lack of organization is one of the worst ways that a company can lose money and whether it is the payroll section, the production line or the I.T. area of your business, disorganization costs money. Your business should be streamlined and prepared to operate in an ever-changing world, if you are not organized either in terms of your business plan or your daily operations then you will fail.
Customer Service
Ridiculous as it sounds, many business owners become so obsessed with success and profits that they forget who it is that is giving them this. The customers are the most important part of every business on the planet and as such you should ensure that your team’s customer service skills are outstanding. Consider the amount of time that your team spend with customers, if they have poor customer service then their sales conversion rate will be low and that disgruntled customer will likely tell at least one of their friends. This kind of poor customer service is almost impossible to quantify in terms of how much money the business would lose, but as you can imagine, we aren’t just talking a few dollars. Get your staff properly trained and ensure that everyone puts the customer first.
It is vital as a business owner that you do not just focus on how much money arrives into your business but also that you spend some time each quarter focussing on what is going out. Bad practices, poor organization and a lack of willingness to cut spending are just some of the ways that you will damage the company’s finances, regardless of what you are bring in with regards to revenue.