Do you constantly find that there’s not as much money in your business balance as there should be? If that’s the case, then it’s probably true to say that there are some leaks in your business model.

You need to make sure that you are working to fix this issue and plugging the holes as soon as they appear. Of course, to do this you need to be able to identify the pain areas in your business budget. So, let’s get started.

Poor Accounting

It is possible that money is draining away due to the simple issue of poor accounting. If this is the problem, then you should perhaps think about hiring an accountant. They will be able to clean up your books in no time and make sure that you aren’t losing money in crucial areas.

After speaking to an accountant you might even find that you have more money in your business than you previously realised. That’s fantastic news.

Of course, at this point you might be thinking, there’s no way an accountant is going to fit into your business budget. Unfortunately that is a possibility for the typical SME, but there’s an alternative to consider here.

You can think about using a software solution instead. With software, it’s possible to keep track of your accounts yourself with a system that provides the basic set up that professional accountants use.

Unpaid

It is possible that you are low on funds because the bills haven’t been paid. Specifically, we’re talking about the bills from customers and buyers. Why does this happen? Well, it’s commonly an issue in the manufacturing world, but it can occur in any business.

Here’s how it happens. You sell your products to buyers and they will immediately receive the products. They will then be delivered an invoice for what they owe. However, at this point, they might not be able to pay up.

It’s possible that they don’t have the money in their own accounts. They could also be waiting for your products to sell if they are planning on passing them onto their customers. Or, they could be waiting to see an ROI from a service that they have bought from you.

At this point, you’ve delivered a product but haven’t been paid and these unpaid invoices can quickly build up. It’s at this point that you may want to explore the option of invoice finance. With invoice finance, you won’t have to worry about chasing up invoices yourself.

Instead, you’ll basically sell these off to another company. They’ll take them off your hands and pay you what they are worth. They will then chase the invoices and get the money back from the original buyer. This gives you the money you need and cuts out a job that you would otherwise need to complete.

Bad Employees

It is possible that it’s a poor employee that is costing you money. Perhaps they are delivering poor service and this is bringing bad reviews to your business. One terrible review can hit your company hard, particularly if it’s left unnoticed.

A bad employee can easily slip through the cracks and stay a lot longer than they perhaps should. They might even just be a slow worker who is dragging down efficiency or lazy. You have two options.

You can either get rid of them immediately or work to improve them. Now, unfortunately, both options are going to cost money.

If you let them go, then this is going to lead to your employee churn. This can cost a business a fortune annually, so you want to reduce it as much as possible. The other option is to keep them but improve their standards.

That’s going to require training, extra support and again money. You also need to think about your duty to the employee. It’s possible that they have an issue in their life which is causing the problem at work.

If that’s the case, then it might be worth exploring this because it shows that you do care about your employees. This is going to help you build up loyalty in your business model too which is incredibly valuable to you as a business owner.

Ultimately, you’re going to have to consider this on a case by case basis. If an employee doesn’t show any interest in improving, it’s better to cut them loose. If however, they clearly have the passion and drive, you can transform them into a valuable resource with just a little work and patience.

Wastage

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There’s a lot of different types of wastage that can plague your business model. We think one of the worst is certainly going to be time. Time really does cost money and if you’re not careful here then you are going to end up losing money by the second.

An example of this could come from tech that is outdated. It wasn't too long ago that 50% of offices were still using Windows XP. While we’re sure that stat has improved, there’s probably still at least a few companies that are working with this old and outdated technology.

The logic behind this is clear and easy to understand. Basically, by avoiding the update, you can make sure that you don’t have to train a whole team of staff to use new software and tech.

This is an expensive and time-consuming process where you might even have to bring in trainers and other experts to assist you. However, this is also a classic example of false economy. In the short term, you save certainly but in the long term?

Not so much because this tech is filled with glitches, bugs and slow load times. All that is going to cause down time and waits which will reduce efficiency and cost you money. By upgrading your tech, everything will be smoother and faster.

At the same time, this will mean that costs are significantly reduced and indeed avoided. That’s exactly what you need for an effective business strategy.

Energy Issues

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What about energy? The world is changing and consumers are becoming far more conscientious about how much damage they are causing to the environment. So, right away by going green, you are going to see big returns.

Customers will reward you for going green, particularly if you know how to draw attention to this in the right way. Again, this could be a matter of improving the technology. After all, the latest tech uses less energy and delivers greater results which are fantastic news.

This includes everything from computer systems to display monitors and more. However, you should also be thinking in terms of renewable power.

Within the next fifteen years, electric will cost close to triple what it costs now. Is this just the natural climb of inflation? Not quite - it’s a worrying sign of the future because electricity is going to become a more precious resource with an increased level of pressure on the grid.

The answer to this problem is solar energy. With solar energy, you can make sure that you get the independent resource you need and create your own power. The best part is that technology in this area is constantly, near continuously improving.

Eventually, it’s going to reach the point where it’s close to 100% efficiency. There are already batteries that will help you store energy and even trade it to provide another income for your business. Again, this trend is going to grow more in the future as well so it’s definitely worth jumping on board.

Too Many Workers

Finally, you need to think about your staff numbers and whether there are too many on your team. First, it’s easy to assume that the more staff you have the more powerful your business model will be. However, this isn’t the case and it will depend on the workers you hire.

If you hire poor workers that have little to no qualifications, you’re going to lose a lot of money here. Similarly, you could have a staff size that far exceeds your business budget. The option that you need to think about here is outsourcing. Through outsourcing, it’s possible to eliminate the costs by passing roles onto businesses.

By doing this you still get a quality solution but you pay one consolidated cost rather than multiple costs to individual team members. You can even bring the outsourcing team onto the payroll only when you need them which is a great option.

There are certain people, like accountants you won’t need throughout the entire fiscal year. However, during tax season they certainly come in handy.

We hope this helps you understand some of the areas where your business model could be bleeding funds. If you plug the leaks, you will have a far more efficient business model and this is going to pay off in the long term.

You’ll be able to make sure that you won’t have to worry about heavy costs dragging down your company and ultimately causing a lot of problems in your business model overall.