Business troubles? Take a Step Back to See the Whole Picture
The world is ever-changing. Those changes impact your business and your bottom line. What worked yesterday for customer acquisition or operations, may need to be changed. Needing a change doesn’t mean your business is not competitive or cannot recapture profits. In order to quickly and effectively uncover the issues and opportunities, you have to understand the key numbers that drive your business.
Declining revenue is not necessarily fixed by bringing in more customers. Understanding your numbers helps you understand what is happening in your business. If you just look at net revenue, you miss a lot of what is happening. If your revenue fell year over year, stop and look at your profit and loss statement first.
Have your prices kept pace with your costs? Meaning, are your margins smaller because your material costs have increased? Check the pricing your vendors are giving you and make sure your margins are where they need to be.
Are there better processes or technology to help reduce your overhead costs? We worked with a business that put off automating (moving from paper to computers) for several years. The business could no longer keep pace with the competition because the competition did not have the management costs and delays that paper created in their industry. Implementing computers meant real-time data and easier communication and information sharing between staff and between the business and its vendors.
As a business development company, companies facing falling revenue often approach Frederick Mountain Group for help with marketing. They want us to help get the word out and spend money and resources on marketing to existing and new customers. However, the first look always begins with the financials. What is happening within the business that is helping or hurting the customer experience?
Before making any investments or changes, the first step is to identify the true cause of your revenue issues. When your business is experiencing declining revenue, it is a difficult time for owners. The change you might need to make may seem difficult too. Correctly diagnosing the issue will help you stop the decline more quickly and turn your business around with smart investment directed at the core issues.