5 Ways Your Business Could Be Losing Money
- Not Tracking Your Revenue Properly
Most people think that they don’t need to know where their revenue is coming from as long as it keeps coming and pays their bills enough for them to keep going and make more of it. The problem is that most people fail to realize that knowing where their money comes from, can help them make a lot more of it. This is simply because their numbers are their proven track records based on who’s actually paying them for their products or services. Did you ever notice that when you place a Google or Facebook ad, they ask you to narrow your search field by asking who you’re targeting and you kind of just think anywhere and everywhere? Knowing who to target can make all the difference in the world because you have your target audience and you don’t need to go through trial and error to perfect your ads.
If you ask a small or mid-sized business owner who/what their top 5 performers are, most don’t know and the ones that who do, don’t realize how much they’re actually making on them. This is what’s known as KPIs (Key Performance Indicators) in the finance industry. KPIs are extremely valuable in every business;, it tells you the story of your business through your numbers. It can tell you how much money you’re actually making after expenses, Customer Acquisition Costs (CAC), and your current Run Rate. Run Rate predicts the future performance of your company using current financial data. A trusted financial advisor can help you determine all of these things and much more., As a business owner you should be focused on managing your business and keep coming up with different products and services to keep your business competitive.
- Not Knowing Where Your Money Is Going
Knowing what your expenses are and how much they’re costing you is extremely important. Today there are so many different vendors that you can buy from. It has never been easier to get a premium product without having to pay the price tag tied to it. How do you know which one is giving you the best rate over all the others? Shop around, new companies are formed everyday and every newcomer wants to get a piece of the market share. This will force them to gain customers and traction for themselves by giving you a discount from a seasoned vet in the industry, which works in your favor.
Inflation is currently at one of its highest points right now. Stay on top of your expenses and, make sure you’re not overpaying for items. Use a different vendor to make sure that you’re getting the best price. This could enable you to offer a more competitive rate to your customers.
- No Budget
One of the most important things you can do for your business is to set up a budget/projection. If you don’t have a clear budget, you’re basically telling yourself that you will pay whatever the cost is for any expense. You’re also telling yourself that you’ll make however much revenue you can in your business. This is fine for some, however, if you want to grow to a full fledged company or brand and be able to scale your growth as fast as possible, you need clear targets. On top of that, you need to make sure you track them.
You have to ask yourself some hard questions, are you close to meeting your targets, if not, why? Planning regularly also helps you deal with change. Nothing is ever the same all the time. The only thing that stays the same is the fact that everything changes at some point. Be on top of the change instead of getting lost behind it.
- Not Having Enough Cash Flow
Cash Flow is key! Every business needs to have a good and healthy cash flow running through it, without the proper setup, you’re essentially placing band-aids over holes in your business, which we all know is only a temporary solution.
Cash flow is also very important when you want to expand. There are many ways to be able to grow your business, whether it’s purchase another company (acquisitions), open another location (footprint expansion), or throw more money into what you’re already doing to get more results (pour gas onto the fire). All of these possibilities require you to have the right cash flow in your company because they all need an initial investment. Cash is key.
- No Goals or Expectations
Set the right goals for yourself! Don’t procrastinate. If you procrastinate, a simple follow up becomes an issue that you need to deal with or a person you’re trying to avoid, which often grows into a bigger issue. Organize your tasks; the more organized you are the faster you’re likely to get something done.
You also need to keep in mind to use some sort of software that helps you and stay on top of things. Wherever you can, outsource! Don’t take everything on by yourself, automate and outsource your work where it’s needed. As a business owner you’re probably wearing a million different hats. Don’t take on more than you can handle, hire someone if you need to. Your time is extremely valuable and needs to be spent doing the day to day, not trying to fix problems that industry specific professionals can help you with.
Stop Losing Money Now—Work with TITAN
Sometimes, despite our best efforts, turning around a business that’s losing us money proves to be a very difficult task. If you’ve found yourself in a position of frustration when it comes to your business finances, you may stand to benefit tremendously from investing in a professional financial consultation. Looking to take the plunge and partner up with a pro? We can help with every single issue mentioned above and so much more. Contact TITAN Financial Pros today for intelligent, professional business CFO services that work for you!
