Losing money in business is always going to be stressful- it’s not possible to keep up with losses for prolonged periods of time. But dwindling profits aren't always a sign that bankruptcy is your next destination, if you go about things in the right way you can make changes and swing it back. Here are five questions to ask yourself when you’re not making as many sales as you’d like.
First things first, if what you’re selling isn’t good enough then you simply aren’t going to make any money. You could have a fantastic office, a professional team, an awesome website and all the motivation in the world. But if your product or service isn’t of good quality then why would people buy it? Conduct market research before having any products mass produced, check there’s a market out there for what you’re selling. This can enable you to make tweaks if needed, or even rethink your whole idea if you discover it’s not going to work. You need to know that there’s a demand for what your business sells, and that you can provide these goods or services at a price that people are happy to pay. Market research allows you to work out any glitches, and make changes before spending huge amounts of money.
In business you do often have to spend money to make money, however it’s a fine balancing act. Overspending will result in slimmer profit margins, and so taking a look at your accounts in detail is important. This doesn't mean scrimping since making cuts in the wrong places could upset your staff (leading to lower productivity) or affect the quality of your product (upsetting customers). You need to know where to spend and where to make savings, use budgeting software and get an accountant in to make sure the books are properly balanced.
Speaking of employee productivity, this can often be a cause of dwindling profits. Treat your staff well and keep their morale up, this involves paying them fairly, listening to any issues they have with compassion and throwing in incentives for them to do their very best work. Your staff are important, they’re the people that make your business run so it needs to be a mutually beneficial agreement between the both of you.
Marketing is so important, but it’s something that new entrepreneurs can overlook. Without the right promotion your business simply won’t reach the right people and you won’t make the sales that you need. It doesn't matter what you do or what you sell, you’ll have competition from other more established businesses. Marketing gets your name out there, and helps to persuade customers to purchase from you rather than other similar businesses. Work with a trustworthy digital marketing agency who will have experience and be able to guide you.
Finally, your reviews can give a real insight into what customers think of your business- so read them often and act accordingly. If you’re noticing trends in complaints and negative feedback then take steps to put the issue right.
