Starting a successful business is difficult, and most business owners are well aware of the factors that will keep them from being successful or not. Unfortunately, there are also factors that could be affecting your bottom line without you realizing it because they are often invisible or hidden. Here’s a look at five of these factors and why they are cutting down on your company’s profits.
1. Website Loading Time
You wouldn’t think that a few seconds’ difference in how fast a web site loads would affect your ability to make sales, but data shows that it does. Almost half of web users expect a website to load in two seconds or less and will abandon a site if it doesn’t load in 3 seconds. A majority, 79 percent, of shoppers who have trouble with a site’s performance claim that they won’t return to a site again to make a purchase, and many shoppers tell their friends about difficult online shopping experiences.
What does this data show? That having a slow site due to fancy graphics or poor design loses you sales both with those who go to your site and with their friends. There are a lot of tools out there to measure your website’s performance and that can make suggestions for how to improve, so your conversion rate no longer has to be affected by a slow load time.
2. Poor Recruiting Practices
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According to a study completed by Career Builder in 2012, when potential job candidates have a bad experience somewhere in the recruiting process it can ultimately affect your organization’s bottom line. This loss comes not only in the form of missing out on talent but also business opportunities further down the road. When job candidates do not hear a response to a job application, 32 percent are less likely to buy a product from that company. The majority of job candidates will talk about a bad interview or other recruitment experience with their friends and family, and many will give up on applying to a job due to technical issues.
3. Employee Turnover
Some business owners or managers think little of it when employees leave, especially when interested candidates are in abundance. The problem with this attitude is employee turnover rates are often a reflection of bigger problems within the company. Employee dissatisfaction often leads to low productivity which affects profits, and the cost of recruiting and hiring a new employee every year quickly adds up. In addition, the loss of expertise and experience in the job field is just one more blow to company’s profitability.
4. IT Maintenance Costs
Whether you are a small business getting your first couple of computers or a large business with an extensive IT system, the cost of maintaining computer technology is often overlooked even though it often ends up being a bigger expenditure than the technology itself. Computers require constant configuring and maintenance with money going toward security measures, application development, repairs and support. As businesses start to collect more and more data due to the surge of mobile users and online shoppers, they have to make expensive upgrades to their databases to keep up. For businesses looking to save on data warehouse costs, there are many companies which offer a cheaper alternative to traditional databases.
5. Poor Public Relations
While a public relations crisis has an obvious effect on a company’s bottom line, many businesses are unaware of the effect their poor PR practices are also having on their profits. Whether its having unfriendly staff on a sales floor or an inefficient logistics system that gets shipments out late, customers who have a bad experience with your store are more likely to avoid doing business with you in the future and may also tell their friends and family about what happened. Unless these customers complain to you directly, you will most likely be unaware that you even lost their business. Evaluate your interactions with customers frequently and look for any parts of the interaction that may upset a customer.
Hopefully this list bring to light some potential hidden costs within your own business structure, and you can take any weaknesses your company has and turn them into strengths. While some expenses are impossible to avoid, keeping tabs on all of them can often reveal ways to increase your bottom line.