The survival of a company relies on both growth and profit. However, there are companies like Spotify, that seem to be flourishing on the market, but are not generating the profits you think they would be. There are investors who value growth are comfortable with the absence of huge margins from the companies they support. As a result, it’s not uncommon to come across huge brand names that are not profitable – or have low margins.
Because tech innovation and demands are part of the equation, large companies that report losses continue to be appealing because their growth stocks outperform their actual value stocks. However, unless you’re one of the top players like Tesla or Amazon, you can’t ditch lack of profitability as an investment into your future growth. Small businesses have no choice but to drive profits if they want to survive. Consequently, you need to pay close attention to the elements in your processes and organization that increase costs unnecessarily.
Thankfully, small businesses are in a position where fixing a couple of issues can make a significant difference. If you’re trying to boost your gains on a limited budget, you might want to consider these options to make sure you can reduce waste in time, money, and skills.
If you’re still relying on your trusted Excel spreadsheet to keep track of all gains and losses in your business, it’s time to move to a modern solution. You can’t expect Excel to know and understand the business rules of bookkeeping. Small businesses that choose to use bookkeeping software tools are less likely to miss payments, or unexpected expenses, and deductions. Working manually through the numbers can not only lead to errors but also accidental misinterpretations of policies and practices. When you simplify your budget to highlight what comes in and out, you might be missing out on additional opportunities and strategies. Besides, manual updating requires constant work and attention. During a busy period, you might fall behind your bookkeeping process. Using an automated tool that does all hard work for you reduces the time you need to spend on crunching numbers, as well as the risk of costly mistakes.
Health and safety fails
Every company is obliged by law to respect the relevant health and safety regulations for the country and the industry sector. Large companies tend to use additional risk audits to ensure the workplace is safe for all. Accidents and injuries can be a costly expense for any company. In small companies, while health and safety is a part of the orientation for every new team member, it’s often left to the employees to somehow know and understand the rules. While you can’t always prove any direct correlation, there is a dramatic impact on the business’ bottom line.
Injured staff are likely to affect your profitability, as absences will increase. Additionally, in a situation when an injury occurs, the business reputation is at stake, even if no fault can be proven. Therefore, it becomes essential for small businesses to introduce in-depth health and safety programs for their teams, to run periodic checks and conduct on-site training for all.
You’re a terrible boss, and you don’t even know it
When your best employees leave, you are likely to find excuses rather than facing the truth. Maybe they found a job closer to home. Or, perhaps they’ve been looking to change their career. You can come up with a lot of reasons to justify a high turnover rate. But the most common reason for resignations is because employees don’t want to work for you anymore. As they quit, the business is left without talent. Additionally, their absence affects morale and overall productivity. Recruiting can be expensive, but you know that you don’t have a choice. But when you know that 70% of an employee’s motivation is influenced by the manager, you need to consider how your behavior affects your staff.
How long do you need to make a decision?
Nobody likes to take decisions lightly in the business world. You need to consider a variety of factors to ensure that you are making the best possible decision. It’s not uncommon for solo-entrepreneurs and small business owners to have a slow decision-making process. Initially, the process is designed to avoid issues and errors. But your desire for perfection can hinder your business growth. Ultimately, when the business doesn’t move with the market, you’re likely to miss out on innovative ideas and opportunities. When you’re stuck in a position when you can’t adapt to the changing market, you can’t make any profit.
You don’t use the knowledge you’ve got in-house
Data is knowledge. Your business is filled with different sources of knowledge, which you can use to support growth. However, despite the availability of data, 73% of the collected information is ever unused. More often than not, companies fail to make sense of data in time and can miss opportunities and threats. Unfortunately, without the appropriate technology, such as cognitive predictive maintenance, it can be difficult to reach a meaningful conclusion on your data.
You’re wasting money on all the latest gadgets
Last but not least, every business understands the importance of technology, well at least they should. In a continually changing environment, companies should know that to remain relevant, they need to boost their online presence.
Your customers are tech-savvy. The typical Millennials owns up to seven different digitally connected devices. It’s fair to say if you can’t cross platforms and channels successfully, you are of no interest to them. But, at the same time, managing your digital presence doesn’t require investing in all the latest gadgets, like high-end laptops. You need reliable tools your team can use every day. Innovative tech can have a counterproductive effect; aside from the price, it can be too complex to use.
By making a few adjustments, you can increase the profitability of your company. Whether you’re spending too much on technology you don’t need or not enough on helpful tools that can simplify business management, running a successful company is about generating a positive return on your activities. What changes can you make today to avoid losses and gain profit? Here’s to YOUR success!
Carolyn R. Owens has over 25 years of proven experience and serves as a Career Strategist, Leadership and Life Coach. She is the Chairwoman and CEO of Infinity Coaching, Inc. where they help you up-level your skills so you can up-level your income. Infinity Coaching, Inc. provides one-on-one and group coaching, organizational training, and personality assessments. Carolyn is certified to give both The Energy Leadership Index Assessment and Myers Briggs Type Indicator (MBTI) Assessment. You can find out more about both assessments and other products and services athttps://www.infinitycoaching.net.