10 SIMPLE PRACTICES THAT CAN MINIMISE LOSSES IN A BUSINESS
Running a business isn’t an easy feat, and Grace is a testimony of such fact. She has had her business running for years, and she is grateful that it hasn’t folded up yet. But, of course, people are always curious to know how she has held down the fort so far.
Some small businesses do not survive their first year because of some constraints. And, we see that only about 78% of small businesses survive their first year. So, Grace was happy to keep the business running after a year and even until now.
According to her, there were some things she had to learn and unlearn along the way as she handled her business, and these are what she has held on to since. Of course, we had to ask Grace to share these practices, and she was delighted to do so.
This article focuses on some of the simple practices a business owner can do that will help minimize losses in a business. Yes, we would ideally say that they should employ all the practices we would talk about in this article. However, we also want to be realistic. So, we would say that they should use the practices that seem feasible to them.
The goal is to help business owners maximize their revenue and eliminate all chances of loss. After all, if a business steadily experiences loss, it would decline, and it might lead to the shutting of the business.
Best Practices to Minimize Business Loss
Some of the best practices to minimize business loss include:
Never be in a rush
Grace advocates that business owners should adopt a slow and steady mindset to help them minimize loss. Understandably, people are always enthusiastic when they begin to run a business, and they do not mind taking some risks. However, it is advised to tone down on the excitement a bit so that you can think with a straight mind.
Due to excitement, some people do not analyze the risk they are about to take. Therefore, they take negative risks, which adversely affect the business. Grace says that she operates like a tortoise as she takes her time before making decisions that affect her business. She understands the need to be daring, but she also loves to be thorough in her things. Grace has seen many businesses fold up because their owners were in a rush for success, and they made the wrong decisions.
To avoid business loss, a business owner must be thoughtful and watchful. It is best to always sleep on decisions and not rush to make them. Even if you missed the chance to make a decision, there would always be other opportunities to do it. However, if you make a wrong decision, there may never be an opportunity to revive the brand and business.
Get intentional employees
A business usually has many stakeholders, and the employees of any business also serve as one of its stakeholders. Of course, people often say that a business cannot exist without its customers. However, that does not mean that you would neglect the brand’s employees. After all, they also serve as the unofficial marketers of the brand.
We often hear employees talking about their brand after work hours, and they are usually exposed to different people. Typically, your target audience is exposed to your employees, and they would believe whatever the employee says about the brand. Therefore, it is only proper to have intentional employees who are poised for the growth and success of the brand.
Of course, we would agree that hiring employees isn’t easy. However, there are HR practitioners to help with this process. Once you notice that your employee isn’t passionate about your business, it would be best to lay them off not to have an adverse effect.
Every business employee has to take that brand as theirs and ensure that their actions are positive and intentional. Grace was always strict on employing only passionate people, and she has been lucky so far.
Have clear policies
What are the policies guiding your business? Unfortunately, some people do not have policies when running their businesses.
Business policies refer to the rules and regulations that guide the operations of your business. And, a business is bound to fail when there are no clear rules and regulations. Ideally, your business policy should be one of the first things you would prepare, even before launching your business. We often see that businesses with clear policies usually operate at higher efficiency than others.
In addition, it isn’t enough to have a business policy, but it also needs to be clear. Therefore, it should be written in simple and understandable English, ensuring that everyone who comes across it understands it immediately.
Everyone affiliated with your business should clearly understand the business policy to ensure that everyone is on the same page. Sadly, if all the business stakeholders do not understand the business policy or relate on the same page, there would be misunderstandings and disparities. And it would lead to the downfall of the business.
To avoid or minimize business loss, it is always best to have a clear business policy.
Hold regular orientation programs
Do you have an onboarding process for your employees? It is one thing to run a business, but it is another thing when you have employees, as you need to carry them along in whatever you are doing. It would be wrong to assume that your employees would understand your business and its values without an orientation or onboarding process.
After all, these employees were formerly affiliated with other businesses. Therefore, there is a need for an orientation program to ensure that you bring them up to date with your expectations and acceptable things within your business.
In addition, it is also important to note that having an orientation program should not be a one-off program. Instead, it should be regular so that all employees would be refreshed. For example, it could be a quarterly or bi-annual orientation program. What matters is that it is constant and regular.
When you have regular orientation programs, no employee would have an excuse for not meeting expectations. And, you will be justified when you want to carry out punishments against them when they default.
Something as trivia as an employee’s attitude towards a customer can cost the business a lot and lead to losses. Therefore, business orientation programs are usually important.
Collaborate with other businesses
We are sure that you have heard people say that no man is an island. And it also applies to businesses as no business should be an island if they are poised at growth and success. In the initial stage of her business, Grace felt that she could do everything alone. However, she soon realized that it was a faulted plan. Since then, she never hesitated to reach out to other businesses for collaborations.
Some people often ask how collaborations would work as they want to know if it is with competitors or people from other industries. However, allow us to tell you that it would be either way, and it depends on your choice.
For example, a fashion business can collaborate with a security brand. In such a case, the fashion brand can supply outfits for members of the security brand. In return, the security team could give them some of their employees to protect their outlet.
Similarly, a fashion business can collaborate with other fashion brands to organize a fair. And, it would be beneficial to everyone as it would give them visibility.
The key to a successful collaboration is ensuring that it benefits all parties so that no business strives over the other.
In the case of collaborating to organize a fair, you would see that all the expenses wouldn’t be on your business alone which comes in handy and helps you minimize loss.
Be poised at customer satisfaction
You wouldn’t be running a business if you are not looking for customers. Therefore, we would say that customers are the heart of any business. Typically, brands have their various target audience which makes up their customer base.
Sadly, we see that many businesses are not customer-centric. Instead, they treat their customers in ways that do not prioritize them. It is always best to remember that the customer is king. Therefore, you must be poised at customer satisfaction.
If a customer is not satisfied with the services of your business, you can be sure that it can lead to the downfall of the brand. For example, an unsatisfied customer can spread it to others that they should avoid your business at it does not prioritize the customers. Once such reviews start going around, people would not want to do any transaction with your brand and it leads to losses.
Yes, you might try to disassociate yourself from such reviews. However, it would be hard. Now, imagine if many people have such negative reviews about your business. So, you can tell that it would negatively the business and it can lead to a downfall.
Therefore, your business must be poised at customer satisfaction to minimize losses for the brand.
Seek expert help
Again, allow us to repeat that running a business is not an easy feat as there are different components involved in running a business. Therefore, we do not expect that you would hack all aspects of running a business. However, you can always outsource duties and seek expert help in some needed areas.
For example, if you are running a business and have a financial background, you would be focused on cash inflow and money management. However, you might find it difficult to recruit employees or run the social media accounts of the business.
In such a case, it would be best to see expert help from HR for the recruitment process as it is their expert area. If you decide to do everything by yourself and do the recruitment, you might end up hiring the wrong hands and it would lead to losses in the business.
In addition, if you decide to handle the social media pages, you might not have enough time on your hands, and you would not run it effectively which would also lead to a loss.
Thus, business owners can minimize losses by outsourcing activities to an expert. It also gives the business owners time to rest and think of ways to boost the business.
Jump on trends
The last thing any business owner should want would be for people to view their brand as outdated or old-fashioned. It would make people lose interest in the business and they may even port to your competitors. Of course, it is easy to argue that the human mind is fickle, and it is easy for people to jump from one brand to another. However, it would not be easy for people to port if the brand offers them something interesting.
We often see that businesses that jump on trends tend to strive better than businesses that are stagnant to trends. It is because their target audience can relate to the various trendy happenings and it leaves them hooked on the business page. It may seem like a little factor, but it usually goes a long way.
The goal should be to make your brand relatable to people. In addition, your target audience should always look forward to the content you put out as it becomes more compelling when they can relate to it. Yes, being trendy is never easy, but it is one of the things you have to do if you want to run a successful business.
Conduct a frequent SWOT analysis
It is one thing to run a business, but it is another thing when you have to do a regular check to ensure that your business is operating smoothly. People often feel that they do not need to put in the extra effort once they have the capital to run a business. However, that is a wrong notion as having the capital to start a business is only the first step to running a business.
As a business owner, you need to be intentional about your business if you want the business to excel and succeed. Being intentional about the business would also help you minimize losses in the business.
So, one of the things you can do would be to conduct a frequent SWOT analysis.
SWOT stands for
S: Strengths: Every business needs to know its strengths as that is what it can use against its competitors. The strengths of a business include things they do effectively better than others which makes them unique in their space.
W: Weaknesses: Of course, it would be unrealistic to think that a business wouldn’t have weaknesses. So, a business needs to identify its weaknesses so it they can improve on those areas and strive better.
O: Opportunities: Every business also has to be on the lookout for opportunities that can they use to boost their business. It is best to keep in mind that there would always be opportunities. So, you need to know how to use these opportunities to improve your business.
T: Threats: It is best not to have a relaxed mindset when running a business as there are factors that could threaten your business. So, the best way is to steadily try to identify these risk factors and eliminate them on time.
Set SMART goals
It is safe for us to assume that you had goals before you decided to start your business. After all, any business that doesn’t have set goals is bound to fail. However, are your business goals SMART? It isn’t always about setting goals, but you must ensure that these goals are SMART for them to be achievable.
If your business goals are not SMART, you won’t achieve them, and it leaves you disappointed. Some business goals are often unrealistic and it leads to losses for the business.
Therefore, your business goals must be:
S: Specific: You must be specific about what you want to achieve. For example, you want to have up to 5,000 followers on Instagram by the first half of the year. Or, you want to increase your sales by 300% before the end of the year.
M: Measurable: It is important that you can measure any goal that you set. There should be metrics that you can use to check the goals to ensure that they are met or not.
A: Attainable: Are these goals realistic? Of course, it is always good to dream big, but your goals must be realistic.
R: Relevant: Why are you setting such goals? Would they be beneficial to your business or are you setting it because you noticed your friend who owns a business also has the same goals? Any goal you set must be relevant to your business.
T: Time-bound: Timelines are also important in setting goals so that you can work with a deadline. We see that people tend to achieve goals when there is a set deadline.
Frequently Asked Questions
Business owners are always curious about minimizing losses, and they tend to have lots of questions. Some of the frequently asked questions include:
What are the processes of loss control?
There are many methods and processes involved in loss control, and we have talked about some of them in this article. Typically, most loss control methods and processes should cut across sales, cash control, theft control, safety, employee theft, and inventory control. Once these sectors are secured, you are sure of having a thriving business.
How can a business reduce loss?
A business can reduce loss by having SMART goals and engaging in all other methods that have been highlighted in this article.
Running a business isn’t easy and we understand when our sellers on Kusnap begin to lament on some of the stress that they face. Yes, we know that it can be a dauting experience.
However, follow the methods we have highlighted in this article to hack ways of minimizing loss in a business.