February 22nd, 2014

60 Ways Profits Leave Your Pockets

Check all the items that apply to you and your business. Add up all your checked items. The more items you have checked, the more work there is to do. However, one big out-of-control item can jeopardize the success of your company. Categorize the items you’ve selected. Prioritize them. Create an action plan based on what you’ve learned in this analysis. Take action. Engage your entire company in this effort. If you are a sole proprietor, get outside help to provide another perspective and consistent accountability.

~ Goalless – no clear financial goals

~ Owner/Arsonist/Firefighter – owner solves problems but creates more

~ 80/20 – not knowing what 20% of activity results in 80% of results

~ Addictive spending – from lattes to laptops

~ Unexpected add-on costs after purchase decisions made

~ Unreliable suppliers – domino effect company misses deadlines, opportunities

~ Lack of clear roles and responsibilities causing lower morale and productivity

~ Inefficient processes / operations; no periodic systems review

~ Telephone / computer systems not audited yearly for best equipment and price

~ Marketing plan missing or plan with no follow-through or budget

~ Absent or inconsistent customer *keep in touch* systems

~ Excessive overhead – no yearly audit to reexamine / reduce costs

~ Not exploring business barter as a way to keep shelter profits

~ Business view too short-term; not considering the 5 – 10 year opportunities

~ No Research and Development team or R&D time for owner

~ Not figuring ROI on ventures; not having an ROI benchmark

~ Company or employee that is on too steep of a learning curve too long

~ Not focusing enough attention on key customers 

~ Minimal customer service = unenthusiastic customers (damned by faint praise)

~ Ignoring Reduce / Reuse / Recycle ethic – buying new when used would do

~ Missing opportunities for collaboration and joint ventures

~ Tolerating lack of productivity, treating employees like children, patronizing

~ Hiring family and/or friends; paying more than they are worth; nepotism 

~ Low employees morale – poor salaries, poor working conditions, no benefits

~ Lack of professional development for staff who lose motivation / stagnate

~ Cash flow problems due to no/slow collection system on accounts receivable

~ Maintaining too many products on hand; stockpiling inventory

~ Late payment of bills which results in lost discounts or late fees

~ Advertising – inadequate feedback; not knowing if advertising is working

~ Indebtedness - cost of money too high, too much credit card debt, bank debt

~ Outdated products or services – demand is weakening or gone

~ Slow execution – by the time the product/service is ready market share is gone

~ Accounting – decision-makers with inadequate information

~ Lack of essential reports – critical data on productivity / markets not tracked

~ Old technology – systems that crash or are incompatible with others 

~ Overspending on technology – always buying the newest when not necessary

~ Lagging behind in communications – especially no email, no website

~ High turnover – employee problems going unnoticed, high cost of replacement

~ Too much/too little on outside experts – not figuring ROI on contract work done

~ Overpayments – property taxes, payables not audited properly

~ Paying top dollar – not comparison shopping for insurance, supplies, goods

~ Excessive benefits – costs not controlled, overpaying of fringes

~ Office furniture / design – spending more than necessary just to satisfy ego

~ Company cars – indiscretion in number or inappropriate employee usage 

~ National / international travel when electronic communications would suffice

~ Last minute purchase for airline tickets & other emergencies – paying more

~ Too many employees, company carrying dead weight

~ Right people in wrong jobs – most have most productive, best for position

~ Best kept secret – customers can’t get to you easily, don’t know about you

~ Plan is absent or old – update regularly, review mission, goals, implementation

~ No reserve – lack of buffer for emergencies or unexpected opportunities

~ Owner with high lifestyle and business supporting it

~ Insufficient incentives and job perks to keep employees creative 

~ Poor or slow follow-up with business prospects

~ Customer attrition – not doing what needs to be done to keep good customers

~ Foggy finances – no regular reporting of finances with review and action steps

~ No customer surveys – not taking to, listening to and learning from your customers

~ Contagious employee dissatisfaction – conveyed to customers and prospects

~ Forgetting what business you are in; trying to be all things to all people

~ Spread too thin, adding products, services, departments too soon