How to Ensure Your Business Makes a Profit
How Invoicing and Job Tracking Software Can Increase Your Revenue
Mar 11, 2008
There is no denying that starting your own business is hard work and developing one that is profitable is even tougher. Half of all small businesses don’t survive their first year and a significantly higher proportion fails to make it through the next four years. Many of these failures are simply to do with not bringing in enough profit to keep the company rolling.
So, Why Are Small Businesses Losing Money?
When faced with a profit crisis, many business owners instinctively react by attempting to reduce running costs. However, this is not always the best way of getting to the crux of the problem.
"What a lot of business owners don’t realise is that, although it is important to keep your operational costs under control, factors such as not invoicing correctly and a general lack of organisation have much more of an impact on your profit margin," says Dr. Chris Main, project manager at Software Associates, one of New Zealand's fastest growing information technology specialists and the brains behind new job tracking and invoicing tool, JobPro.
"Many small businesses, especially in the service sector, are not as profitable as they could be due to lost dockets, a lack of standardised billing and the huge amount of paperwork they have to sift through for relatively little gain," adds Chris.
How to Protect Your Profit Margins
One way to solve the problem of misplaced invoices and overwhelming piles of paperwork is to embrace electronic devices and software. Innovative new job tracking and invoicing tools are becoming increasingly popular, allowing business owners to keep track of job progress and billable hours more effectively than was ever previously possible.
"Lost dockets and a tendency to undercharge can easily shave 1-5% off a small business’s profits," explains Chris. "Job tracking and invoicing software that is specifically configured to suit each individual business can help put an end to this profit drain."
Business owners don’t even need to be particularly IT-savvy to use this kind of software. It usually takes just a couple of hours of training to get to grips with how to use it. This business tool is also surprisingly cost effective. For example, JobPro, can be purchased for under $10,000, including all training, set-up costs and support. Not bad for something that could increase your profit margin by up to 5%. Everest Software in the United States and Sage Software in the United Kingdom also offer similar, good value software packages for small businesses.
What Else Can You Do?
As well as investing in up-to-the-minute technology, there are a number of other things that businesses can do to maximise their profits.
"All businesses, from international corporations to more modestly sized start-up companies, should pay close attention to what I like to call the three ‘Ps’’, advises Chris. "Pricing, performance and paperwork."
"If you keep your billing organised and constant, make sure that clients can depend on you to carry out consistently good, punctual work and ensure that your paperwork is under control then you are on the right track towards bringing in the income that you deserve and making your business a success," adds Chris.
It doesn’t take much to push a small or start-up company over the edge. However, paying attention to the details, being as organised as possible and keeping up to date with modern technologies will put the odds in your favour and ensure that your company doesn’t join the many small businesses that don’t bring in enough profit to survive those first few, highly crucial and vulnerable years.
Resources
The Small Business Administration, United States
Chris Main from Software Associates, New Zealand
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