The goal of a business owner is to make a profit to provide for themselves and their employees. If a business owner doesn’t keep track of their finances, they’re likely losing opportunities to increase profits. By extension, they’re also losing money. With this in mind, a business owner must look into preventing losses as a way of making money. By changing your attitude from ‘how to make money’ to ‘how to avoid losing money’ a business owner can start increasing profits and make noticeable gains.
This blog lists ways your business can avoid losing money, so read on to get started.
#1 – Be Organised
As simple as it may sound, being organised goes a long way if you want to prevent losing profit. By this, we mean that you should always keep your financial records in a well-organized manner. We’re not saying that you should have a huge filing cabinet. A simple 3-ring binder or even a storage box would work just fine for your small business. However, you must have a place where you can keep all of your business’s financial records in one place.
Not only will this be convenient for you, but this will also be convenient for any accountant that analyses your financial records for you, so business growth plans can be put in place.
At MKS Group our business mentoring professionals help you create a one page business plan to give you clarity and support growth for your business strategy. Learn more by clicking the button here
#2 – Develop Marketing Plans
If you want your business to be successful and continue to stay in business, you need to develop a marketing plan. A marketing plan is a plan that will help you decide which marketing channels you will use to reach your target market.
For example, you can determine that you will advertise your business on social media or have a marketing plan that aims to grow through word of mouth, which to this day is still the most powerful marketing tool for many businesses. In other words, a marketing plan can also help you identify what marketing strategies you’ll use and when you’ll use them.
#3 Exceed Expectations and Provide Customer Service
You significantly increase your chances of returning customers to you when you can exceed expectations and provide excellent customer service. Your customers won’t think of going to your competitors. It’s also likely that your business will get more referrals (word of mouth marketing) because satisfied customers tend to tell their friends that you provide excellent customer service. For that reason, exceed your customer expectations and strive to provide excellent customer service.
#4 Set Appropriate Prices
Setting fair prices is crucial to prevent losing money. By underpricing or undercutting competitors pricing for your products or services will contribute to your business losing money. On the other hand, you must not overprice your products or services as customers won’t buy them. Finding that sweet spot or equilibrium price will mean your business is running effectively and efficiently. You need to consider what the market rate for your product or services are, and if you are setting a premium price, make sure there is a differentiating reason why or additional value to the customer to warrant the higher price. If you are considering discounting stock, we have a blog you can read here on how to discount effectively.
#5 Hire the Right People
A business that hires the wrong people can equate to losing money simply because having the wrong people in the wrong roles can cause reputational and relational damage. This could be relationships with clients or with other staff, which will cause more stress for business owners. Hiring only the best people can be crucial to how your business is perceived and prevent your business from losing money.
Conclusion
Losing money is a part of doing business. However, with the right strategies and steps, you can prevent losing money and make sure that your business stays in business and continues to provide for you, your family and your employees.
MKS Group are experienced accountants that can help you keep track of your business finances. We often say we are more than numbers, and can assist in other ways, such as developing growth plans and strategies to ensure your business will thrive. Contact us today to learn more!
(03) 9374 8400
