5 Reasons Your Business Isn’t Making Money
by Samantha Meldrum
The number one question I often get is “Samantha, how do I grow my business?” not “Samantha, how can I make money?” I often find, when I dig deeper, people are asking the wrong question about their business. They should be more concerned with making money not growing their business.
If your business is unhealthy, it isn’t a question of growth but of why you’re not making money. Only when your business is healthy, can you then focus on growth. Below are some of the reasons your business isn’t making money.
1) You’re selling to the wrong people
When you go into business, you most likely know what you want to offer. What is harder to figure out is who will buy your products/services. Not having a clearly defined target market is one reason you’re not making money.
For example, if I make trendy clothes for women age 18-35 years, I am not going to try to sell them to women age 35-50 years. The bottom line is, you’re not going to make money if you sell to people who don’t need or want your products.
To determine your target market, create a profile of your ideal customer. Your ideal customer is someone who is interested in and would buy your products.
Use demographics criteria such as age, gender, and income to form your profile. Also, use psychographics and behavioral criteria such as hobbies, buying habits, and spending habits to form you profile.
Once you know who is more likely to buy your products and services, direct your sales efforts to those people.
2) You’re focusing on the wrong products/services
Another reason your business isn’t making money is that you’re not focusing on the right products and services. Make sure you’re creating products for your customers, not finding customers for your products.
For example, say I sell wedding invitations and I want to expand my business by adding a new product line. I’m not going to add a jewelry line to my business. However, I would add something more suitable like wedding favors or wedding shower supplies.
It is much easier to sell your customers something they need or want than not. So, conduct regular surveys to find out what products/services your customers want. Furthermore, find out how you can make your customers’ lives easier.
Use the information collected to create products and services that already have customers!Create products and services that already have customers. - Samantha Meldrum Click To Tweet
3) Your business lacks clarity
One of the biggest challenges for entrepreneurs is marketing their business. This challenge becomes harder if you lack clarity in your business. If you’re confused and unfocused in your business, your message becomes confused and unfocused.
Customers need to trust you before they invest money in your business. If your message confuses them, they won’t trust your business or invest in it. No trust, no making money! You need to put together a strong message about your business and promote your message consistently.
Clearly define the focus of your business and how your products will help your customers. More specifically, you need to clearly articulate to your customers your value and your product benefits.
4) You marketing and sales efforts are lacking
It doesn’t matter what type of business you’re in, you need to spend half of your time on marketing and sales activities. I know! Easier said than done, right?
Everyday you’re busy juggling a lot of balls in the air. As a business owner, you’re creating products, running your business, etc. You just don’t have oodles of time to spend on marketing and sales. But, here’s the thing. There is no sense creating stuff if no one sees it or hears about it.
If you’re not talking to your customers about your business and thinking of ways to make more sales, then you’re not going to be making money. One of the great things about talking to your customers is you get to know each other. As a result, they feel comfortable buying your products and you learn about what they need.
5) You let self-doubt win
When your business isn’t making money, it’s painful. You watch money pour out the door while none come in for weeks or months on end. Meanwhile, you’re trying to keep you business afloat, wondering what the heck you got yourself into.
It’s easy to start doubting yourself. But, first things first. Stop selling yourself short and letting self-doubt win. This happens to more people than your realize. Gain confidence in you and your ability to succeed in business. Then, get to work!
Figure out what is and isn’t working in your business; then, recalibrate your business so you’re making money. If you would like help in building a successful business, checkout the 5-Step Business Planner. It was designed to create a roadmap so you can do just that!