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Salt Lake City Bookkeeping Blog

Is Your Small Business Leaving Money On The Table?

Posted by Matt Roberge on Sep 22, 2014 7:00:00 AM

My Business Is Losing MoneyDid you ever think that you may be leaving some money behind in your small business? Do you think that your sales as well as profits could be better? If you said yes then maybe you are leaving some potential money behind in your small business. Buy why would you do this? Most likely you are not even aware that you are doing it. Here are a few ways you are possibly missing out on revenues and profits in your small business.

Not Following Up

One reason you may be leaving potential revenue behind is by not following up. Some people are pretty bad about following up. This not only goes for following up with potential clients, but current customers, and your referral sources. Following up with potential leads is obviously your biggest opportunity to grow revenues, but many people fail to do it. Sometimes they disqualify leads too early in the process or they tell themselves they don't have time to follow up. If a business owner does follow up with a prospect they often go right into selling to prospects rather than trying to help them.

Following up with customers keeps them happy and they tend to want to stay with your services. Following up with referral sources is incredibly important especially when they have given you a referral. You want to certainly thank them for the referral but you also want to let them know how it went. It doesn't matter if it went poorly with the referral, you want them to know. Also, if they sent you a bad referral let them know so they don't make the same mistake in the future. 

Undercharging

One way that you may be leaving additional revenues behind is by undercharging for your services. Some business owners get uncomfortable when it comes to talking about price. So uncomfortable sometimes that when a prospect asks them "Is that the best you can do?" they cave almost every single time. What this leads to is them undercharging for their services because they go into negotiations. We typically don't negotiate on price at all, we sell value. We give fair prices for our services and stick to them, negotiating on price leads to undercharging for your services. You must know what you are worth and not be afraid to stick to your guns on price. 

Invoicing and Collection Problems 

Some businesses leave revenue behind because they have issues with sending invoices and then collecting on them. Ever get a bill from a service provider for services rendered several months ago? You just think to yourself "Oh yeah I remember that. Geez it took them a long time to send the bill." Then you toss the bill in a pile and pay it several weeks later. Most people take a long time to pay their bills. Some because they are smart and know how to control cash flow, while others are just disorganized and lazy when it comes to paying bills. You have to establish good invoicing procedures and policies with your team so you don't leave any time unbilled. You should move all of your invoicing to a digital method where you email invoices from QuickBooks. It makes no sense these days to mail anything.

Then after you send out invoices there is the challenge of collecting on bills. You need to establish clear billing policies with all of your customers so they are on the same page. Then when accounts go overdue (this is inevitable) you need to follow up with those clients and get paid. Methods like accepting or requiring payments by credit card will certainly help with overdue invoices. 

Not Asking for Referrals

This one is huge; one way you are leaving money behind is by not asking for referrals. You might tell me that you ask people for referrals all the time that are in your network. However, what about your customers? Let me explain this a bit. You do a good job for all of your customers right? You need to ask your customers for referrals and do it often. For a smaller company I would recommend until you are a few weeks into working with one another. Once you have proven yourself and everyone is getting along ask for a referral. If you don't ask your customers for a referral they will only give you a referral when a blatant one hits them in the face. When you ask for a referral you create awareness and if you are doing a good job they will go out of the way to send you additional clients. 

Not Selling Enough

One way you are probably leaving revenue behind is by not selling enough. People like to come up with all sorts of excuses in small business for not doing something. Common excuses include a lack of time, money, or knowledge. When it comes to sales there is always something to do. You can't say you don't have anything to do in sales because you can make something happen. You can write a blog, a new eBook, or a whitepaper to try and attract prospects. You can follow up on some old leads. You can find some new networking events to attend. You can get some sales training to help you fill up your pipeline. In sales there is always something to do, yet small business owners tend to not spend enough time prospecting and selling.

Many small businesses are leaving money behind because they continue to follow bad habits and do things incorrectly. Don't leave revenues behind in your small business; get every dollar that is coming to you.

How else do small businesses leave potential revenues behind?

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Topics: Small Business Growth, Grow Your Business, Small Business, Small Business Sales