While opening up a new business can be exciting, it can also be harrowing. Many small businesses close within just a year or two of opening, often due to a lack of financial planning or preparation. One of the best ways to help your business succeed is to search for ways that you might be losing money every month. When you locate areas that are costing you valuable revenue, you can make the necessary changes to keep more of your income. Here are a few ways to stop your business from losing money.
1. Shop around for better rates.
If you've kept the same utility, credit card, or shipping company for a while, it's time to reevaluate how much you're spending on these costs. You might be approaching the end of your initial contract, which presents an ideal time to contact the companies for lower rates. If your existing providers are unwilling to reduce your prices, spend some time shopping around for new service providers to see if you can cut back on these monthly expenses. Make sure that you won't have to sacrifice an important service to get a lower price, though.
2. Take a second look at your staffing needs.
Do you have employees? Now is a good time to see if you actually need to employ them all. Making staff reductions is always difficult, but it may be critical to helping your business stay afloat, especially if you're in the middle of a slow sales period. Even if you decide not to make any staffing cutbacks, you might find that you could make better use of your workers' talents by moving some of them to different departments.
3. Reassess the value of your marketing efforts.
A good marketing campaign can make the difference between losses and profits. However, continuing to sink revenue into expensive marketing efforts that are not producing a valuable return is just a waste of good money. Take an honest look at your marketing costs to see if you're seeing an uptick in profits as a result of your campaigns. If not, feel free to cut back on costs or even drop some of the marketing altogether.
Don't get caught up in the excitement of starting up your own company and forget to review your regular costs frequently. If you learn how to stop your business from losing money, you can rest assured that you'll enjoy the fruits of your hard work for years to come.