09/22/2023
"THIS LITTLE RISKY BUSINESS OF MINE"
Lesson #1: Know Your True Costs ( )
With and of goods on the rise over this last quarter, business owners cannot afford (literally) to not understand their goods/services. A recent cleaning service client unfortunately learned just how risky her company became because of a lack of discipline assessing her accurate costs of doing business. After 3 quarters of losing money on every service sold, she realized that the business had been operating in the RED for over six months. She assumed this could be rectified by simply "making up the deficit on future volume and sales." Sidenote: This is not a viable solution as you can only estimate future sales. Due to this shortfall, she had to lay off staff and now has to personally perform the work on her open contracts.
TIPS:
1. $TOP SELLING AT A LO$$. (periodt)
2. CONSIDER ALL THE COSTS OF BRINGING YOUR PRODUCT/SERVICE TO THE MARKET - including your administrative/overhead costs such as increased monthly fees for software, internet service, invoicing system, job supplies, etc. Either eliminate or streamline your expenses.
3. CREATE A CUSTOMER SERVICE POLICY to guide how you convert value-added benefits to your clients despite having a higher price than your competitors. Loyalty award points are still pretty popular!
4. ASSESS WHETHER YOU HAVE AN UNPROFITABLE PRODUCT. Sustaining an unprofitable product indefinitely is not always desirable, unless it is considered a new emerging technology/service to increase customer interest and uptake. Ask yourself will sustaining this product eventually create value over the long term?
Photo Credit: 10136964 © Bowie15 | Dreamstime.com
