Duh, money helps you get ahead, pay your bills, accelerate business growth, expand your brand AND MORE! That said, make sure your business is always making a profit, and not losing money in tiny ways that one day could kill whatever profits you’re making, or worse, burn you out in what you do for a living.
What should you watch out for that can kill your profits?
While most good business owners achieve the mild goal of making a profit by providing a good service and controlling costs, once profit is attained, all business owners must keep their hard-earned profits from being eroded by:
- No Profit Planning … Are you working (in your own business) just to get by? Why not plan ahead into the future, make some great plans for yourself to grow your business beyond leaps and bounds. If your business doesn’t grow by 10% every year, then we’ve got a problem. Sure you might be small today, by average business standards, but dream (and plan) that one day your company name, brand and name will be a household name. That means, studying the media, getting into it, getting free publicity, speaking on behalf of what you do, etc. GET OUT THERE!
- Giving Away Billable Hours For Free … This is a biggy! Make it a rule, each new client receives only 15-30 minutes of free consulting up front to “win” their business. Thereafter, charge for every move you make. That includes, reading/responding to ALL their eMails, doing research, answering their phone call, etc. Simply create a CUSTOMER CARE PACKAGE, which includes x-number of hours for x-price. If you have 20 clients tugging at you every month for “only 5 minutes each” PER WEEK, that’s a lot of time you could be making money. You’re not in the charity business. Charge for your time or go do something more worthwhile.
- Giving Away Your Products For Free … Just because you like someone, or feel you want to be “generous” and “giving”, don’t just give away your products for free? There are costs involved in producing those products, and perhaps, time involved in creating them. I had a client once who said, “Bart, let me give you one of my books!” Before she could put pen to paper to autograph it for me, I told her to stop! “Give me the electronic version. I’m your friend. Don’t waste a book on me, which you could sell to a perfect stranger.” She thanked me, and sent me the eBook version of the book. I saved her $20 in profit somewhere. Imagine if she did that 5 times in a month? That’s $100 down the drain. Books have costs, as well as other physical products.
- Not Lowering Various Service Fees & Overhead Waste … Have you checked your cell phone bill lately? Have you at least called them to see if they’re running any specials, which might allow you to drop your cell phone bill down by $20-50 a month? In four months, you could save $200! That sounds like free money to spend on some online advertising through Google AdWords or Facebook ads. Look through the various services you pay for each month to see if you couldn’t knock some of those bills down, or get rid of them. Whoops, that’s the next tip in protecting your profit. What about your office space? Do you really need so much room? Could you work from home? Maybe convert a spare room or part of the garage or attic or basement to work? Seriously. There are so many ways to take advantage of “virtual office space” rentals where you don’t have to rent full office space any more.
- Maintaining Useless Services … This is a biggy. Check your bank statement, every month or at least every couple of months. Look at the vendors extracting monthly service fees out of your bank account. Do you need those services anymore? You might have a YEAR ago, but not today. Cleaning up and getting rid of useless services, can save you potential hundreds every year. Again, more advertising money.
- Working In Your Business Rather Than On It … Another profit losing battle. If you’re too busy swabbing the deck of your ship, and not looking out over the vast ocean of business opportunity, how can you ever get ahead? Think about ways of separating yourself from the business, by delegating more, outsourcing smaller tasks more … all so you can spend more time creating more customer relationships, more business, new businesses, etc. Always be expanding.
- Not Spotting/Riding Trends & Waves … Another tactic many business owners don’t take advantage of, and that’s the newness of trends and fads that come in and out of the market. You already have a client based that loves what you sell or have to offer. Well? Introduce to them something new or a twist of what you already do wrapped around a trend or fad that’s happening in the market. Or, if you see something coming in the future, research it, plan for it, so when it comes ’round, you’re ready to capitalize on that wave and make a new kind of profit.
- Not Diversifying Your Business & Selling Other Products/Services … So, you offer one product or service, but you don’t bother to diversify and sell other stuff to your same list? You already have their attention, why not sell other products and services to them as well. Doing so will? Add more money to the bottom line, and your profit zone!
- Not Learning New Skills … If you can add a new skill to your current skill-set, at least once a year or more, then you can probably look forward to adding new monies and profits to your bottom line. Learn a new piece of software. Get certified in a new practice. Adding knowledge to your brain is like adding profit potential to your bank account. DO IT!
- Not Building/Maintaining A List … The profit is in your LIST, not your blog articles. Such as, the more people know about you, the more you stay in front of them (with your newsletter or eZine or eMail specials that go out to them on a regular basis), the more you’ll stay in the profit zone, making sales, than not!
- Not Selling Ads On Your Site Or In Your eZine … Does your website get a lot of new traffic to it every day, week, month? Why aren’t you selling ads on it? Also, if you have a huge list of over 5,000 subscribers, you should be selling advertising space in your eZine. Five ad spots per weekly eZine x 4 publications = 20 ad spots x $20 average ad spot = an extra $400 per month in free money! That sounds like a nice car payment (or two) to me!
- Not Upselling Other Products/Services … You have their attention at the check out page or even at your store or maybe on the phone! Why not upsell them to something else? “Would you like fries with that?” Same philosophy. Introduce new and other products that compliment what they’re buying.
- Not Creating a Customer Loyalty program … Here’s where you can create addition profits (or at least cash-flow a flowin’) by keeping customers loyal to your brand of products/services.
- Not Creating an INNER-CIRCLE Club … Are you someone people would like to get close to so they can learn “how you do what you do?” Create an inner circle coaching club, limited to x-number of people, and charge for membership into this club. Suppose you limited it to 50 people per month and charged $200 a month to be privy to how you do things, secrets you use, trends you see, how you capitalize on the market … That sounds like an extra $10,000 in lost profit if you don’t do this!
- Not Following Up … Many sales get lost simply because people don’t follow up. Follow up, and make that sale! There, that was simple.
- Not Having A Sales Team or Affiliate Program … Affiliate programs are relatively inexpensive to maintain, yet can bring in profits every single day if you have a lot of people selling for you online. You can’t be in all places at once. So? Enlist the help of others to sell for you and make more money when others sell for you!
- Not Training Your Affiliates or Sales Team … How can people make sales for you if they don’t know what you know about your product/service or who the best target market is for your product/service? Train your sales people weekly, monthly bi-annually, etc. to ensure they know who to go after and how best to represent your product/service as they sell it in the marketplace.
- Not Providing Your Sales Team & Affiliates With Marketing Tools … Training them is one thing, but if you don’t give your sales people or affiliates the selling tools and marketing materials they to promote your products/services, then they will have a harder time doing so than if you had furnished these tools to them.
- Ask & You Shall Receive (Referrals) … If you don’t ask your current clients to refer their friend and family to you, how will you grow your business? Ask, and you shall receive!
- No Innovation … If you don’t improve upon your brand, service or your business image in the marketplace, you might be wiped out of business. For example, are you still selling cassette tapes? Eight-track tapes? Phonographs? Exactly! People don’t even buy CD’s very much anymore. So, innovate and improve upon what it is you sell.
- Not Budgeting Properly … Some businesses hire too many employees, purchase too much inventory, or do too much of something that winds up putting them OUT of business. Keep track of your budget expenditures and/or hire an accountant to help you crunch the numbers daily, weekly, monthly, and/or quarterly for you. Or else? Risk going under!
- Celebrating Yourself & Your Business Into The “Broke” House … Watch out for too much partying and celebrating your success with lavish spending sprees and the like. Imagine this, your sales are going up Up UP, and so you think the money will never run and customers will just keep buying and buying. Until, one day, no one wants to buy from you any more, or that trend is no longer “in” or “hot”, or they (customers) get mad that customer service has fallen, because you thought you had it all in the bag and so you didn’t spend much time serving their needs as much as you did serving you and your friends and co-workers drinks and meals out on the town. Companies in every industry have gone under because they spent all their profits in all the wrong places. They got destroyed from within, whether it was from overhead going over budget, or legal fees, or taxes they couldn’t pay because they didn’t save their profits/earnings to pay them. Again, you can just imagine. Don’t let this happen to you. Stay humble, stay conservative, stay on top of your success and give thanks away to others; not your profits.
- Insurance … Some businesses get wiped out because they don’t have the right type of insurance to keep them in business, when they get attacked by an unhappy client, etc. Check to see if your business could incur lost profits from the threat of a lawsuit. Should you shield yourself better with a stronger type of business structure?
- Legal Expenses … Depending on the type of business you’re in, you may need access to an attorney on a regular basis. Make sure your attorney is not costing you an arm and a leg and make sure the reason why you are hiring the attorney in the first place is not causing you to go into the poorhouse!
- Taxes … Here’s an easy way to find ways to save money …. on your taxes! Are you taking advantage of all the tax laws in this country by setting up your business in an income tax free or sales tax free state? How about tax deductions? Are you making the most of your legal, allowable tax deductions? You better be, or you’re giving away monies at the end of the year that could be yours to spend on? More marketing and profit research!
These are the “Profit Killers” that business owners, for the most part, can do very little about unless your business is properly structured and you’re educated on just how and when these “Profit Killers” poke their nasty heads into your business.