Money Problems: What's Causing Them and How to Solve Them
When you start a business, your main goal is to be lucrative. To make things work your staff needs to be properly trained, your service must be impeccable, your finances should be in order, and there are so many other areas to keep an eye on that it is easy for certain details to fall through the cracks.
Your small business may be losing money without you even noticing it. It might be something simple to correct, but if you don't catch it sooner rather than later, it can turn into an unmanageable problem. Here are some of the most common reasons why businesses lose money:
Faulty Online Presence
You might not think so but not having an online presence —website, email marketing, social media— can hurt you more than you know. After all, we are living in the digital era. People want to connect with you and to learn more about you.
If you don't have a social media presence now or it needs a makeover, don't postpone it any longer. Become active on social media and get a good website set up. That can improve engagement, which can help increase conversions. But having social media or a website is not something you check off a list. It is an ongoing thing that must be done right for it to work.
Bad Customer Service
Excellent customer service is crucial for any business, big or small. Did you know that companies lose about $75 million a year for lousy customer service? You'd be surprised how many customers don't feel valued, have bumped into rude employees, or don't feel like they are given the answers they need.
Don't be afraid to ask your clients for an online review on your site, Google, or your favorite review platform. That allows them to say what they think and keep your team accountable.
High Turnover Rate
It hurts a business when employees come and go. Having to replace staff that leaves can be a costly process, especially when you lose top performers. This can impact productivity and profit.
Find out why it is that employees are leaving you. If the cause is internal, take time to work on the things that need to be accomplished to improve the situation. External factors may also affect an employee's decision to leave. However, those are out of your control.
Inefficient Employer/Employee Communication
Excellent communication is everything in business, even more so for starting businesses. If communication is a problem, it must be worked on before it burns through all your money. Establish communication processes and protocols to ensure everyone is on the same page. Take time to be a good listener, provide feedback, and be willing to receive feedback too.
Poor Accounting
Unless you are a certified accountant, it is best to leave your finances in the hands of a professional. The accounting process must be transparent and organized to prevent costly issues.
Hire a professional accountant to keep your books, establish internal auditing processes, and execute them frequently, keep your personal accounts separate from your business accounts. All these are good practices that can prevent you from making the most common money mistakes.
Losing money, without knowing how or why it's happening, is incredibly dangerous for your business. Keep a close eye on your operation and be ready to act quickly, when needed.