Here are 7 ways that small business owners lose profit. Do any of these apply to you?
If you are struggling with any of these you are not alone but take this opportunity to reach out and see how you can target your approach to excel in business.
Find your ideal customer
If you want the best possible results in your business then you need to know who your ideal customer is. That is, who wants to buy your product or service. There is an old saying which is “you can’t boil the ocean”.
In other words, if you try to appeal to too many people with what you are offering, and your message, will be diluted. You need a niche and within that niche to know what your ideal customer looks like. Then your marketing, and everything you do, can be built around what they need, want and desire.
Who is your ideal customer?
Being the same as your competitors and competing on their terms
This is a recipe for disaster. You are giving away your profit, causing unnecessary stress on your business.
So, what’s the solution?
You need to have points of difference so that customers are buying from you for what makes you different, not because you have the cheapest price. Think about a brand like Dyson, they are constantly developing products that are different. Are they the cheapest? Absolutely not, they are premium priced products delivering what their customers want.
So, what makes you different?
Know your numbers
Imagine driving your car with no dashboard, no instruments, and no feedback.
The chances are that you will get a speeding ticket, run out of fuel or cause damage to the car in some way.
Feedback is essential for a safe and successful trip.
Many small business owners have no dashboard and do not even know how much profit they made last month. Knowing the numbers is essential so that you can know what you need to improve and what is already working well.
What sort of dashboard do you have in your business?
Repeat customers
It costs a lot more money to acquire a new customer than it does to keep an existing one.
Often business owners neglect the needs of their existing customers and take them for granted.
They rarely call them. They rarely ask their opinion on how to improve. They are not even sure what brought them to you in the first place.
The Result?
The result of this neglect is that the customer starts to feel unloved, undervalued and frustrated. The end result is that these hard won customers will simply go elsewhere. So what could you do to make your customers want to stay with you longer?
Are you guilty of taking them for granted?
Value your team
Let’s face it we all want to feel loved, appreciated, and listened to. Yet so often small business team members feel undervalued, frustrated and believe that their boss does not really care.
There is no proper training, performance reviews or praise when they have done well.
Just like customers, once a team member has had enough, they will simply get up and move to another employer. Finding and training great staff is difficult, time consuming and expensive.
What systems do you have in place to ensure that your team members want to stay with you and are not on the verge of planning their escape?
Realistic expectations
As business owners it is easy to tell ourselves the story that everything is rosy and that the business is better than it is.
We focus on being busy rather than profitable and drilling down into the numbers.
When business owners do talk about numbers it is often their turnover, sales or revenue and not the amount of profit they are making.
As the saying goes “turnover is vanity, profit is sanity and money in the bank is reality”.
What are you doing to track the numbers in your business so that you are being realistic and not telling yourself a story which is hiding the truth?
Future focus
If you have been running a business for a while its easy to think that ‘we have always done it that way’ and continue to do what you have always done. After all, it has worked so far, hasn’t it?
This can be a big mistake because technology is changing at an alarming rate.
The ability to attract new customers with social media, and the explosion of artificial intelligence, means that tasks that used to be labour intensive and frustrating can now be done for you without having to hire more staff or be a computer wizard.
Using that technology can save thousands of dollars and the consequences of overcommitting resources long term. Are you embracing the technology, particularly AI, that is available?
Or are you still doing everything the way you always have?