How Small Businesses Lose Money Every Year From Poor Planning

Any number of issues can destroy even a seemingly-profitable small business. It’s surprising to note, though, that many businesses fail not because of outside factors but because of their own poor planning. Below are a few ways that small businesses tend to lose money due to their own lack of planning.

Ignoring Trends

Many businesses operate by the maxim of ‘if it ain’t broke, don’t fix it’. Doing business in a way that has always worked can make sense, but it utterly ignores the fact that the business world is always training. Failing to plan for the changes in the market is a good way to ensure that a once-profitable small business can suddenly lose its ability to stay competitive with those businesses that pay more attention to the world around them.

Using the Wrong Utilities

Every dollar matters to a small business. Poor utility systems can cost businesses money not only through higher utility bills but through repair bills. A good commercial HVAC system can help a business to reduce its bills, efficiently heat and cool its stores, and avoid having to deal with massive bills when something goes wrong. Choosing the wrong system, though, is a good way to watch operating funds dry up as the weather heats up and cools down.

Employee Illness

Having proper staffing is always good. Sick employees, unfortunately, can be a huge liability for any small business. Not only are they less efficient than employees who are in good health, but they can also spread illness to other employees. This not only leads to more people calling out sick, but to more employees having to work overtime to pick up the slack. In time, the losses caused by sick employees can far outweigh the benefits of having ill employees come into work.

Vendor Changes

Many businesses make the fatal mistake of assuming that their vendors are their friends. While it’s very possible to have a friendly and profitable relationship with vendors, it’s important to remember that vendors are also running a business. If a small business doesn’t account for the fact that a vendor’s prices may change or that they may no longer be a priority, they can find themselves paying too much for stock or failing to what they need to turn a profit.

It’s always important to plan for the future. Whether it’s in the arena of staffing or utilities, a business needs to be efficient and to know how to handle problems. Simply preparing for change can go a long way towards protecting a business’s viability.