Maintaining and increasing profit margins is essential for business success. Take a look below at the top reasons companies lose money and see if you can eliminate some of the areas your business is losing money.
Top Areas Your Business Is Losing Money & How To Fix It
1. Inefficient Processes
No matter what industry you’re in, take a look at your processes. Even if you’ve been doing a specific task a certain way for years, it might be time to adjust. Can you eliminate a step? Can you automate any of the processes through a software? Sometimes a little investment can help you save time and money in the long run.
2. Collections-Related Issues
Unbilled Invoices: Don’t forget to issue the invoices, have a lean process regarding invoice issuing, and don’t wait until the end of the month to send the issued invoices to your customers. It is best to send the invoices right after you complete the work or delivered the products. If your customer accepts it, email the invoice to them for instant delivery. The sooner they receive the invoice, the sooner you’ll get paid.
Collect Accounts Receivables: Payment terms may already be net 30, 60, or even 90 days. Having to wait even longer can cause added stress to your business. Staying on top of unpaid invoices to help ensure payment is essential for your company’s success.TCI Business Capital offers same-day payment on your invoices through invoice factoring, eliminating the wait on customer service. As a value-added service, TCI Business Capital provides professional AR Specialists to give your customers friendly reminders when payment is due on their invoices.
3. Employee-Related Issues
Inefficient Onboarding Process: Recruiting, hiring, and training takes time and costs your business capital. Make sure you have an onboarding process and an efficient one. Taking the time to properly onboard and train your employees will help lower your turnover rate and save your company money.
Disengaged Employees: Disengaged employees can have a negative impact on your business and lower productivity. Periodically measure engagement and come up with improvement plans and implement them. A fair compensation and benefits system, constant communication and feedback, development and promotion opportunities, as well as a participative management style will help keep your employees engaged.
Poorly Trained or Untrained Employees: Technologies, processes, and management are constantly changing. Don’t assume that people are catching things up from thin air. Be sure you are providing your employees with the proper training opportunities to keep up with changes.
4. Marketing ROI
Measure the ROI (return on investment) you get from your marketing activities. Be sure always to test and try new outlets. Outdated marketing campaigns can be a money pitfall. Just because it worked in the past, doesn’t mean it is the most efficient way to reach new customers today.
5. Customer-Related Issues
Always follow up to your customers’ inquiries as soon as possibles. Remember, there are several ways your customers can reach you (phone, email, fax, social media), so be sure to have a system in place, so no message gets ignored.
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