What to do if you’re Operating at Loss
If you’ve noticed that your business is operating at a loss, here are some things you can try to help move you back into profitability…
Reduce Your Expenses
One of the main reasons you’ll be operating at a loss is because you’re spending out too much. Think about whether you can do any of the following things to reduce your business spending:
- Is there anything you can cut from your spending? I.e. supplies, staffing costs, cheaper insurance premiums, etc.
- Can you reduce the amount of drawings you’re taking from the business? If you’re operating as a solopreneur, are you able to take a pay cut while you work your way back to profit, so that more money is left in the business each month?
- Try to negotiate better deals with suppliers. If your pet business relies on use of supplies (such as shampoos, flea and tick treatments, dog food, etc) try to negotiate better deals with suppliers, or shop around to see if you could save money elsewhere.
- Sell assets you’re no longer using. If you’ve purchased equipment that hasn’t been utilized in carrying out your services, sell it on to bring some additional money back into your business.
Increase Your Sales
This might sound like an obvious (and difficult) thing to do, but increasing your sales doesn’t necessarily have to mean bringing in a larger network of customers. Think about the following:
- Have you priced your services correctly? Return to the competitor and market research you conducted at the beginning of setting up your business and take a look at where your current pricing sits in this. If you’ve priced your services cheaper than your competitors to try and undercut them, perhaps there’s room to increase your prices in line with the competition to improve the amount of money you’re making. You should regularly review your marketing research as a standard practice.
- Consider how you can sell more? Is your marketing reaching a wide enough audience? Evaluate your current marketing strategies and take stock of the return you’re getting from them. There’s no point in paying for digital ads, or printing posters and flyers if you’re not seeing return. Cut back where necessary and invest in marketing opportunities that your data shows you your audience will engage with. With the Book Your Pet business software, you can automatically reach new customers without having to increase your marketing spend.
- Are your services competitive? Again, revisit your competitors and look at what services and packages they’re offering that are proving popular with customers and consider how you can match and exceed their offerings.
Seek Professional Advice
We always recommend seeking the help of a financial advisor, regardless of how capable you feel with managing your own finances. It’s their job to delve deep into the mechanics of your business and they’ll often be able to recognize opportunities for you to make adjustments that will put you back on track and avoid you falling into debt.