Proven Ways Businesses Lose Money That Seem Insignificant

The only way for your business to win is to generate a steady profit. That’s why you act quickly and decisively when you spot issues that cut into your bottom line. From your point of view, there is no time for delay. However, bosses can be proactive when they understand a problem and lacking when they don’t see it as an issue. It’s not as if you don’t think it needs fixing; more that you don’t believe it to be a huge pitfall at the moment. The flaw in this logic is that it only takes one misjudgement before the company begins to lose money.

With that in mind, here are four problems that seem insignificant yet are not.

Property Damage

A hole in the roof isn’t great, there’s no doubt about it, but it’s not a catastrophe. It’s not as if you’ve lost a million-dollar client or sponsor. Still, the immediate losses don’t need to be considerable for you to contact an industrial roof repair service straight away. After all, a hole in the roof will cause you to pay more in overhead fees due to the firm’s extra energy output. And, it’s not only the roof because a cracked window or door is a security risk. You should think about the potential side-effects of letting property damage linger.

Shared Bank Accounts

To save time, you might consider the idea of using your personal bank account for business purposes. Debt, credit or savings, it’s a terrible idea because funds get muddled very quickly. Before you know it, you lose track of which money is yours and which is the company’s, and this confusion leads to overspending. Let’s face it – how do you stick to a budget if you don’t know how much money is at your disposal? Even if it’s a basic account, a separate account for corporate resources is crucial.

No Investments 

As far as proven ways for businesses to lose money go, this is the most popular. If you’re wondering why it’s due to the stigma around investments. Enterprises don’t have much cash to spare, so pumping it into stocks and bonds isn’t appealing as there is an element of risk. It’s better to put it into an account and accrue interest. Of course, the rates fluctuate and the average could be less than 1% for the year. While an investment portfolio isn’t guaranteed, putting money into the likes of Apple and Coke is as close to a sure-thing as possible. Plus, the median return will be closer to 4% or 5%

Poor Product Pricing

You’re new and don’t want to turn customers off by pricing your products and services out of their reach. On the flip side, going to either extreme means that you are leaving money on the table. Therefore, the key is to find a middle ground that appeals to shoppers without cutting into your profit margin. You might require help because the process isn’t straightforward. If in doubt, you can look to your competitors and analyse their rates.

Are you making any of these mistakes?