No business owner likes to see a leaking ship. More so when that ship is their own business. Bud sadly, businesses around the world are losing revenue in more ways imaginable. This is inherently at odds with a company’s ability to stay afloat.
If these leaks are not addressed, then a company might well be starring at the end of the road. Considering this report from CNBC, more than 7.5 million small businesses are at risk of permanently closing. So that’s why companies of all sizes need to address the loss of revenue.
If you find yourself in a similar situation, then here is how to fix it.
Preventing the loss of revenue isn’t possible if businesses don’t get organized and fast. Looking at the long-term future is just as important as the day you launched your business. So one way to address both is by developing systems to stay organized.
This is a big reason why businesses are losing money. From missing paperwork to missing spreadsheets that track expenses, businesses need to organize these documents to avoid losing money in both the short-term and long-term.
Fix Your Accounting
No doubt a huge reason why businesses are losing revenue is bad accounting. Not knowing the numbers of your operations is a huge problem for companies of all sizes. This is even more damaging for smaller companies that employ a few people.
Every entrepreneur should understand the importance of getting your finances in check. Bad accounting can cause so many problems. The most damaging one is not knowing how much money you have. Even more so, this leads to businesses losing revenue.
Another way bad accounting negatively impacts revenue is by making small errors. These errors might be small, but they have a big impact on finances. For example, repeatedly buying office supplies might not feel like that big of an issue, but it does drain your finances.
If multiple of these small errors are constantly doing the rounds, then it will ultimately have a severe impact on cash flow.
Poorly Pricing Products
In troubling financial times, a company might feel that increasing prices for products is a good thing. The reasons for that might be many, such as increasing production costs. But unfortunately, this is a bad idea as basing a price on costs will ultimately crush your business.
Poorly pricing products based on cost is the biggest mistake a business can make. No doubt poorly pricing products have more to do with setting a higher price than a lower one.
While setting a price too low does have its own set of disadvantages, putting a much higher price is ten times worse. Considering that we live in a world where anyone can make a copy of your product, poorly pricing your products will only drive customers to your competitors.
While there are ways to pull this off, not every business can do it. For a company to sell products well over the average for that product on the market, they have to be a global brand. Even more so, it takes years for a company to convince people that their product is well worth the money.
Spending Too Much Money Online
The online world presents small and medium-sized businesses with an excellent opportunity to market themselves much cheaper. But there comes a point where excessively spending money on online ads ultimately harms your revenue. When this happens, it is much difficult to maintain a positive cash flow.
So what smaller companies need to do is stop excessive online spending. Instead, look for smart ways to run social media campaigns and similar online advertisements.
Not Having Enough Online Presence
Having a website and a few social media profiles is exactly what every small business needs to establish a solid online presence. And while we did talk about excessive spending online, that shouldn’t stop businesses from establishing that presence.
In today’s time, most people go online and look for ways to solve their problems. When a potential client needs your services, they will look for you online. But how will they find you if you’re not online? The longer you wait to establish an online presence, the more money you’re losing. Even if owning a website will cost you some money, it presents a potential revenue stream.