Check out the name of this blog. Investor Square. It should come as no surprise to you that we’re pretty big on money here, especially as it relates to business. So when a business is losing money at an alarming rate, that’s a very concerning thing to us. In fact, you could say that we’d be compelled to write an article filled with advice for businesses suffering from this problem.
Well, here it is. If you’re running a business that is losing money, you should read ahead. We’re going to be looking at the most common reasons businesses lose money. If you’re thinking about starting up a business, or investing in one, then this will help you take some preventative measures.
Using inferior technology
You may have thought that getting the cheaper equipment options was a smart idea. After all, it saved you a bunch in upfront costs, right? The problem with really cheap equipment or technology is that it’s not as powerful or reliable. It may require expensive fixes or constant attention. Its output won’t match that of the more expensive option. It might not be as able to make back its own cost as the other options may have been.
Hiring too many people
For some business owners, having an abundance of employees is a sign that you’re successful. But what if you’re hiring more employees than you actually need? Are you sure your small business needs a full-time accountant if you’re just starting out? You might be better outsourcing certain jobs until you’ve gotten a little bigger.
Hiring the wrong people
So you’ve decided to tighten the recruitment budget and hire fewer people. Hopefully, this is a step that works well for your business. But now you need to be even more careful about who you hire. When you hire lots of people, certain employees can act as a buffer for the less capable ones. But if you’re working with fewer people, you need all of those people to be incredible at their job. Be extra careful when writing job descriptions and checking references and experience.
Investing in things you don’t need
Do you know how many businesses out there are buying high-end technology they don’t need? I know I said you shouldn’t be using inferior technology. But that doesn’t mean you should be using all the technology you can get your hands on! Many businesses also get office space that isn’t suitable for them. I’ve seen too many small businesses using offices that were way too big for their needs. This just ends up wasting so much money. Virtual offices, or co-working spaces, might be better in such circumstances. You can see what I’m talking about at Office Evolution.
No business personality
Your business personality is akin to your brand. It’s what is going to help people remember you. These days, in social media-saturated times, people want personality and humor. They almost expect it from pretty much every business. Make sure you’re using your social media accounts to interact with users, to allude to current events, to tell and share jokes. Bring a memorable personality and set of ethics into the way you do business.