A recent reader question to me was:
“Kim, how can I stop the money from being spent from my sole proprietorship? I am watching my money, tightened down on credit and am working on increasing sales.”
The reader didn’ t tell me specifics and I can’t say what is or what isn’t being spent. I would think that he should be able to react faster than a corporation but I have no clue as to what this person’s savings are.
So here are some general plugs to fit any size sink where money is being lost down the drain.
1. If you are a sole prop, watch your expenses. If business is down, see where you can cut expenses. You need to still advertise to keep a market presence but be ruthless in getting rid of advertising that isn’t working.
2. Determine if you are married or have a significant other, that you or your partner aren’t bleeding off excess cash that could be used to run the business. If that is the case, shame on you! Time to change and read some of my blogs on savings.
3. Examine shrinkage precautions. If you subcontract or hire part timers, look for shrinkage. That is the fancy word for theft. Are inventories dropping and the money isn’t showing up to cover the missing product? Time to install cameras if you own a store.
Are you sure you can trust your business partner? I mean, really sure? A lot of times, spouses or lovers refuse to look at the obvious that their BFFD (best friend forever, dear or by five finger discount?) is cleaning them out.
Take appropriate steps and take action.
The only person who can insure that the leaks get plugged and the caulking stays in the bowl of your business if you are the one who does it. If you are paying for outside consultants or contractors, listen to what they say, even if you don’t agree with them. If they are the experts in the field you are working in, they are the ones who might be able to help you turn the faucets on with more financial pressure and get you a gusher of cash!
Kim Greenblatt
You are plugging cash leaks with Kim Greenblatt in his blog, profitable.