HOW TO STOP YOUR BUSINESS FROM LOSING MONEY
- Invest in your staff
-qualified staff, employee training or a professional recruitment resource may improve the quality and productivity of your workforce, as well as keeping turnover low. And with the cost of hiring and training new staff potentially being significantly higher than retaining and continually upskilling current employees, keeping that turnover down may save some serious cash (and some painful interview time).
As well as building the practical skills of their team members, business owners and leaders should also invest in their own leadership and abilities.
“Consider getting a good business coach who can help you avoid costly mistakes along the way,” Anna advises.
- Get the price right
Overcharging for your products or services can drive customers away, while undercharging could drain profits.
Commonly, prices are set based on total cost of sale (including production marketing, sales and all overheads) plus margin or profit, or they may be based on how much the competition charges for similar goods or services. The latter strategy though is not a quick fix – to avoid making a loss on goods and services, you still need to know the total cost of sale to ensure a margin is in place.
Small businesses with good reputations may also consider setting prices that align with the quality of their work. If you provide a better-quality product or service, and you can communicate the value of that quality to your customer base, you may be able to charge more than a competitor.
Whichever pricing strategy you use, avoid guesswork and rushing into setting a price – revisit your pricing regularly and when shipping, material or staff costs increase.
“Business owners need to spend time looking into market position, business costs and margins to ensure their price is sustainable,” says Anna.
Making a profit is key to small business survival – use these five tips to get the basics right, and you’ll be on your way to thriving