Being a business owner has its benefits. For starters, you get the opportunity to build wealth while addressing your clients’ needs. However, your dreams of building wealth can be halted if your business keeps losing money. Statistics reveal that 30% of small businesses constantly lose money, although 40% are successful. Several elements may be responsible for your company incurring losses. That said, here are a few ways your business is losing money and how you can correct them.
- Low-quality customer service
Your customers are essential to your business’s survival and growth. A Microsoft survey revealed that 90% of American consumers consider customer service before patronizing a business. Salesforce Research indicates that 78% of customers will stay loyal to a company with good customer care, irrespective of their mistakes. These statistics reiterate the necessity of treating your clients right. If you fail to serve them well, you may lose their patronage, decreasing sales. Moreover, negative reviews from unhappy clients can damage your business reputation. Newvoicemedia research indicates that US businesses lose approximately $75 billion due to poor customer service.
Fortunately, you can correct this with the right steps. You can begin by training your employees to be more empathetic and patient with your clients, irrespective of their moods. Also, clear communication helps you and your staff relay your message to them. As a tip, use positive language to relay information. You can also send personalized messages and gifts on your clients’ birthdays and seek feedback on your products and services. You’ll also find it helpful to swiftly address customer complaints while doing so politely.
- Wrong or outdated technology
Technology for businesses is advantageous, making it ironic that it can cause your business to lose money. However, using the wrong or outdated kind can be more harmful than beneficial. A Microsoft survey revealed that 91% of consumers would stop patronizing businesses with outdated tech. Moreover, you can experience many downtimes, decreasing productivity and employee morale. The time wasted can also give your competitors the advantage to snatch your existing and potential customers. You also risk spending more on IT repair fees, damaged hardware parts, etc. Therefore, it’s expedient to update your technology to avoid these issues.
That said, it’s prudent to replace your outdated software and hardware to increase your business productivity and give you a competitive edge. Likewise, ensure that you run the latest operating system on your PCs to enjoy the full benefits of your updated technology. Your website is also an essential business feature, and improving it will help your clients interact with your business without hitches. Consequently, avoid overly complicated processes to avoid time waste and stressful operations.
Another aspect that is constantly overlooked when it comes to technology is ensuring its physical safety and best practices. For example, is your technology well protected both digitally and physically? Have you installed the appropriate anti-virus software or firewalls to keep it safe from cyber attacks? Do you have good enough physical security measures in place to protect your technology from intruders? And what about some of the more basic requirements such as cable organization ? Loose and stray cables can present a danger to staff but also to the efficiency and working order of the technology you use. Damaged cables, tech, or injured employers as a result of poorly organized wires could end up costing you.
- High turnover rates
While it’s not unusual for employees to leave your company, high turnover rates can be problematic. An Investopedia survey indicates that an employee who earns $8/hour can cost a business approximately $3,500 when they leave. Additionally, companies spend around $1,866 and 47.6 hours yearly for training each employee. These figures reveal how costly it can be to lose your staff at an alarmingly high rate. A high turnover rate can damage your business’s reputation and prevent top talents from working with you. Moreover, disgruntled employees may not put in their best efforts, and the quality of your product or service will decline. Therefore, you’ll find it beneficial to keep your staff happy and satisfied with working with you.
You can achieve this by hiring people who have the required skills and can adapt to your company culture. Compensation is a key motivation for employees, so ensure that you offer competitive salaries and other benefits. It’s also prudent to appreciate and reward their hard work and offer constructive criticism instead of humiliating them for their mistakes. You can offer flexible work arrangements, where your employees can choose how, when, and where to work. Employees with toxic behaviors can push others out of your company. Therefore, it’s essential to identify and devise ways to correct their behaviors. If they refuse to change, replacing them would be in order.
- Cybersecurity issues
A Cybersecurity Ventures research revealed that global cybercrime costs will increase by 15% annually for the next five years, amounting to $10.5 trillion by 2025. Another study also indicates that 43% of cyber-attacks are targeted at small businesses, while only 14% of businesses can defend themselves. Cyber-attacks can cause customers and suppliers to stop transactions with you for fear of losing their vital information. You also risk losing intellectual property to cybercriminals, who may sell them to your competitors. Therefore, implementing strong cybersecurity measures is essential.
Begin by improving your password protection to prevent crimes like credential stuffing. But, what is credential stuffing? It occurs when bots test stolen passwords and usernames across different websites to carry out fraudulent activities. Also, train your employees to follow security protocols and audit your systems to identify and fix weaknesses.