This article is inspired by “How to Diagnose What’s Wrong With Your Business” by Jay Goltz who owns five small businesses in Chicago.
If you suffer from low profits, lack of growth, or stress from never-ending demands, here are 9 factors that can be the cause:
1. Targeting the wrong customers. Are your sales and marketing efforts targeting the customers who will buy your services? The shotgun approach is too expensive and may not work before you run out of marketing money.
2. Advertising and Public Relations. Have you given a lot of thought to where you should be advertising and where to focus a PR campaign? It’s important to measure results carefully and adjust accordingly. What magazines, websites, newsletters are your best customers reading?
3. The message. Has your message been around for decades? If it’s a tired message, time to come up with a new one that says something to your potential customers about your company.
4. Hiring. Hiring the right people is the key to any business. Hiring must be a process that can be repeated. It can’t be hit or miss. A good hire means everything to your business. Hiring the right people is 75% of managing a business.
5. Firing the wrong people is the next step but for those who may not have hired their first, this may be irrelevant. Just remember – employees who are not making the business better (especially relatives) are hurting the business and must go.
6. Organization. Does your business have systems, policies, standards?
7. Basic Accounting. This is about a lot more than just taxes. It’s information such as tracking sales, expenses, profits and more. A good accountant can help you set it all up the right way. While great accounting will not make a business great, poor accounting can destroy a business.
8. Pricing. This is an area where most self-employed people have a lot of trouble. The prices you charge must be determined based on your real costs as well as the value of what you sell. Accounting can help determine the true costs of your service. Are you really making a profit if your are not covering your costs?
9. Financing. At some point nearly every business needs some financial infusion. Whether it’s from bank loans, savings, credit cards, investors or other sources, there’s a lot to know about finance. Again, a good accountant can help your business grow. If your accountant only does tax returns, you’ll have to look further for this help.