When you set out to start your business, you have nothing but high hopes. However, many times, new business owners find themselves losing money quickly without an idea of where or how to fix it. Fortunately, they aren’t alone. In fact, more than half of new businesses will fail within 5 years. Most times, businesses begin to lose money from lack of proper business planning, disorganization in accounting, heavy employee turnover or poor service, and incorrect pricing of their product. These problems can be fixed with the right tools and can help your business skyrocket to success.
Bad or Incomplete Accounting
Your accounting records are the backbone of business planning. These records show a clear picture of your income, assets, and debts, along with all secondary, tertiary, and unaccounted for funds. Your accounting should never fall behind. Timely entry of your transactions prevents overspending and overstretching that can lead to serious setbacks. Accuracy also counts. Mixing up numbers or amounts can end up costing your company big bucks. Many times, it pays to employ an in-house accountant or contract the services of a business accountant to ensure proper record keeping.
Whether your employees are constantly leaving or they are delivering bad service, both are detrimental to your business, and both can be prevented. Battle high employee turnover in the business planning stage by adjusting benefits, salary, or other perks. More specialized position details and applicant screening can also help minimize employee turnover by focusing on specialized required skills and expectations. Ensure your training endeavors are productive with highly organized and well-planned training modules. These can include, hands-on activities, worksheet-based lessons, mentor-led techniques, or a combination to provide a well-rounded and complete training experience.
While most businesses assume they are pricing their products parallel to their market, many times, the pricing is either too high to be cost-effective for the consumer or too low to turn a profit. In order to effectively figure pricing, consider the time spent planning, making, and distributing the product, along with the cost of materials, advertising, and promotion. This will help to create a much more accurate pricing model that can not only end up saving you money but your customer as well.
Though starting a business is an exciting and fast-moving time, in order to be successful, the correct steps must still be followed. The R Moon Consulting team can help you devise a comprehensive strategic plan and stick to it, for the ultimate business planning experience. Call us today at (888) 342-6167 to get started.