Small businesses have a hard time growing when they’ve just started, and a lot of the challenge is making sure your business is water-tight. It’s not uncommon for a business to be leaking money when they don’t have the means to do so, but the sooner you get working on your internal problems, the better. No business is perfect, so you should never think that your business has no room for improvement, Focused Energy consultants can give you the insight to grow your business, and drive profitability. You could be losing a lot of money without even being aware of it. You could be putting that money back into your business in a better way!
Get your prices right
One of the more common ways that businesses lose out on money is from improperly pricing their products and services. Sure, setting your prices lower than your competition is one way to gain the attention of your customers, but if you could be doing just as well with higher prices, think of the amount of money that you’re losing. A lot of research needs to go into how you price things, and you should consider checking out competitors to see what methods they employ to attract attention without making their prices too low.
Pricing things too high might have the same effect. While you might not be selling as many items that are priced too low, you would simply not be selling anything. This is even more dangerous for your profits if you sell perishable products, but overall, you’ll want to make sure you have your prices right as soon as possible. Once a customer has seen your prices are too high for them, they may not return.
If you don’t have anyone employed who is experienced when it comes to accounting, then there’s a chance you’re losing out on a lot of money that you should have. A business needs to be able to keep track of how much money is being made, and how much money is going out.
If you don’t know how much you’ve earned, you can’t possibly expect to make positive investments. You can’t easily see what areas need to be improved, and which are working well. Good accounting within a business is essential if you’re going to stop your business from leaking money.
In addition, you will also need to maintain compliance, which is particularly important if, for example, you are needing to record and report leases for the business. For this reason, you will need to learn more about ASC 842 and how great software for leases can help to account for and report leases correctly for you.
You might have already lost a lot of money as a business, and you need to get it back through other means. A lot of the time, there are things that you’ve been overcharged for or things you’ve overpaid for. If this is the case, you might be able to get it back through legal means.
For example, if you’ve overpaid when it comes to duty and taxes on exporting items – you’ll want to look into duty drawbacks for exports. If the tax recovery services you pick can find evidence of you overpaying, then you could find you’re due a large sum of money as a result. That’s money that you could use somewhere better within your business.
Overly generous promotions
Promotions are an important part of every business, they’re good for you, they’re good for the customer, and everyone wins. However, a good promotion means optimizing your prices and deals to match your interests and the customers’ at the same time. Of course, you’re going to be losing out a little on regular profits, but you’ll be increasing your sales significantly at the same time.
Promotions like a reward or loyalty system ensure that your customers return enough times before you have to give anything away. This is a great way to ensure that you’re getting your sales while satisfying the customer at the same time. In some cases, it can be better to give away free products if you’re able to guarantee larger sales.
Lack of free resources
If there’s one thing an entrepreneur has to be, it’s an opportunist. You should be ready to jump at any beneficial opportunity that comes your way. An event you can network at? No time to lose! A possibility of a collaboration? Could work out great for your business! That’s why it’s so important that you’re taking every opportunity you can get when it comes to free resources that you could be making use of. For example, social media is an easy-to-use platform that requires time investment more than anything else.
You can use it to grow your consumer base and create a great gateway for you to communicate with your customers. You can advertise, receive feedback, and build trust!