I’ve always liked the bucket analogy. There’s no point filling a bucket with water if it’s full of holes and leaking. Your business might be generating a lot of revenue, but if you have “holes in your bucket” you could be losing more cash than you think. Here are four “holes” that need to be plugged right away.
1. Forgotten subscriptions
With the recent influx of SaaS services, (Software as a Service, which are usually subscription based) a lot of companies are paying subscription fees every month. Sometimes a free trial turns into a monthly bill a business owner just wasn’t expecting, and doesn’t get canceled. The charges start adding up pretty quickly under the radar.
Check your bank statements for the last two months and make sure you understand every charge on the list. If you find a subscription that’s been unused but you’ve been paying for it, you can sometimes get a refund for those months.
2. Not asking for referrals
The opportunity cost of not asking for referrals is huge—especially in a business-to-business setting. Referrals can be a huge source of income for your company.
The most effective form of marketing is word of mouth. When your customers refer their friends, they are taking some ownership in your success. And, their referral warms their friends up to your business.
You’re losing easy money if you’re not asking your satisfied customers for referrals.
3. Waiting to get a business loan until an emergency
Lenders love solid companies. If you look like a secure business, and you’ve got your financials in order, it’s pretty easy to get a business loan with a good rate.
Unfortunately, a lot of small business owners wait until they absolutely need a business loan to stay afloat. Usually at this point their financials are rocky, and their business is on the cliff’s edge. This looks like a risky investment to lenders, so if you get a business loan, it’s going to have a higher interest rate.
Constantly be on the lookout for upcoming challenges/opportunities for your business. If you identify them early enough, you can get a business loan in time. We’ve helped tons of people get a business loan, and we’ve learned the earlier you get your business loan, the better.
4. Using the wrong marketing
Marketing is almost always a good investment, but you have to make sure you’re using the right marketing. You probably get lots of people calling you and knocking on your door to tell you about the best way to market your business.
My advice, do your research. Salesmen will try to wrap their advertising medium to fit your business, but a lot of the time, it just doesn’t fit. Billboards are great for restaurants, but terrible for acoustic design companies. Understand your audience, and find the best fit for them.
There are tons of ways for you to lose money, and you have to remain diligent in looking for them. When you find them though, and take care of them, it feels just as good as getting a new sale. I’ll leave you with these wise words from Benjamin Franklin, “A penny saved is a penny earned.”