Hidden Costs Of Poor Business Management
2 MIN READ
As they say, if a business is not growing it is dying. Business growth is always the aim for the entrepreneur but often you can find yourself in a plateau that is difficult to pull yourself out of. As you go about with a business process analysis of the day to day of management of your business, you will see the things that you’re spending money on, the performance of your staff, customer responses, and engagement to advertising.
Often we measure what IS happening in our business but we overlook what IS not happening. If you don’t manage your human operations well, you may find yourself off the beaten track of business growth. There will be five key things that you won’t be seeing in your business:
The first thing you won’t be seeing is returning customers, which is a devastating hidden cost for the business owner seeking growth. If you don’t have systems in place to guarantee that your customers will experience an overwhelmingly positive experience every single time, you may well find that many simply won’t come back. You will miss out on their business, their referrals, their testimonials and their rave reviews. If you are trading online you will also pay the price with Google when you lose their visits to your website.
A decline in customers will of course lead declining revenue, and if you mix this challenge with poorly managed expenses you could land yourself in hot water with your cashflow. Poor management is expensive. If you’re running too much stock, too many staff, exorbitantly expensive advertising or training, or if you or your team are doing poorly with controlling regular the costs overheads, you’ll find cash flow will take a nosedive, and you will miss out on the profitable cash flow you need to grow your business.
Your reputation is everything in business. So a decline in customers won’t only mean declining revenue and referrals, it will also open up the risk of them creating quite a nasty reputation for you in negative reviews and feedback online. Good news spreads fast, but bad news spreads like wildfire. You need to ensure you get the referrals and the testimonials you need to thrive, which will always come down to how you train your staff, how you delivering your products and services, and how you follow up to nurture your precious customers.
You’ll find the next hidden cost of poor business management in your staffing. The investment most business owners make into their staff recruitment, onboarding, and management is often one of the biggest costs on the balance sheet. You need systems to facilitate a positive experience for them professionally, socially and emotionally, or you may find yourself spending too much money on training, wages or ongoing maintenance. If your staff are not productive and efficient, they will cost you too much in time and money.
The last hidden cost of poor business management is found in your time, and the time of the people in your team. Inefficiencies are expensive because all those tiny little micro-moments lost in poor management add up. You might explore how much time is lost in your business because people don’t know what to do, they can’t find what they need, or they stall over a cuppa or conversation because they’re not really motivated. That cost of time takes its toll, and it’s certainly a cost of poor management that most people simply don’t count.
Every business owner wants to deliver a really happy, wonderful, reliable experience for their staff and customers alike, where you’re solving problems and exceeding expectations You want to earn great word of mouth feedback to go out into the community for referrals and testimonials and it takes great systems to achieve that. When systems are bedded down and clear for everyone, you will be able to nail those goals every single time.
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