As a merchant, the only way to keep your doors open is to generate profits. But according to research, 75 per cent of start-up businesses barely survive for two years. It all starts with a few losses then it gets to larger chunks of losses, and the company is forced to close doors.
If your business is not making money, it’s important to establish the causes. The sooner you can seal the leaks, the higher the chances you can start reaping profits. These are the most common ways businesses are losing money, according to Rainey Collins Lawyers and other debt recovery lawyers:
Taking too long to follow up on leads
How long does it take you to get back to customers who call or email to inquire about your products or services? If you take three days to get back, reduce this to 24 hours and you will begin to see a remarkable increase in your sales.
When a customer calls your company, you can be sure that they would call your competitors as well. Avoid losing sales to your competitors by following up with potential customers promptly.
Little knowledge of the pros and cons of offering credit to customers
Offering your customer credit can be a rewarding endeavour when done right. But it’s a risky affair, particularly for start-ups. The two huge risks of offering credit are when customers fail to pay or when they make late payments. While the former ties down your profits, the latter makes you incur losses.
Outdated technology also means slower processes and lower efficiency. You need modern, cutting-edge systems to scale and meet customers’ demands. There is a lot to learn about modern technology and ways to implement it in your business.
The truth about businesses is that money never entirely vanishes. To stop the haemorrhage of cash, you must first know where your business is bleeding money.