Why You Are Losing Money: Identify the Leaks First

If you think of your business like a boat, you can imagine that having a few tiny holes may slow you down, but you won’t sink for a while. However, if you have LOTS of tiny holes, you will start to sink quickly and spend most of your time scooping out water, instead of moving forward towards your destination.

Having worked with thousands of business owners, I have learned that the 3 biggest leaks show up in: your people, your processes, and your pipeline.

A recent 2018 Gallup study of employee engagement found th

at more than 66% of all employees are anywhere from “somewhat disengaged” to “actively disengaged”. Only 34% of employees are enthusiastic and committed to their work, a

nd at least 16.5% are “actively disengaged”, meaning that they hate their job (or their boss) and may be actively sabotaging the workplace.

On the other hand, organizations that are the best at engaging their employees are able to achieve earnings four times that of their competitors. Those in the top 25% of employee engagement realize substantially better customer engagement, higher productivity, better retention, fewer accidents, and 21% higher profitability. Your “people leaks” are the biggest source of holes in your boat!

There are a number of ways to determine if you do in fact have “people leaks.” One clear indicator is if your deadlines are constantly being missed by you and your team. A possible cause of this delay could be that your employees are squabbling and these conflicts between team members are decreasing productivity. These team members may also be flakey, in that they arrive at work late, frequently leave early or often take sick days.

Your “people leaks” may also be limited to one or a few team members. You may find that you have one, or a few employees who seem to be able to take down the morale of the entire team. It can be extremely difficult to address these issues. You may even be feeling like you are the only person that cares about the business, and that everyone else is just here for the paycheck. These feelings may be valid, and are certainly a sign that there are “people leaks” in your business.

These issues can seriously impact your bottom line. When your team is not operating at their optimal performance, productivity wanes and profits can disappear.

However, there are ways to combat these “people leaks.” One suggestion is to have a clear hiring strategy, and hire people aligned with your values and vision, as well as skills. Once you hire the right candidate, establish a clear path for them to be trained and moved seamlessly into the team. Accountability is also a key factor in a successful team, so having an employee manual that everyone signs can also help solidify the commitment.

Of course, you may find yourself on the other side of the equation, where you’ve already hired a team, and are left wondering how to address the issues that already exist. Conducting performance evaluations on a regular basis with clear methods for improvement can help you to turn around productivity problems. This is also a great time to ensure that all team roles and responsibilities are clearly defined and understood. Additionally, be sure to have regular opportunities for recognition and appreciation. Offer your managers opportunities to learn how to be more coach-like, encouraging and supportive.

The next area of leaks are “process leaks”. There are basically three areas of business that we need to attend to. These are: sales, administration, finance, and operations, and each of them need a system or process to work most efficiently.

Systems include policies, procedures and processes for anything that has to be done more than one time. The bottom line is: to have a business that works, you must have a system for everything. Systems will liberate you!

There are a number of indicators of “process leaks'' that you may not even be aware of. One common issue that often goes unchecked is that your team members might unknowingly be doing the same tasks. Not only this, but your system for ensuring that delegated tasks are completed may be leaking. How do you and/or your managers know that the assignments they’ve given out have been completed? Do you have a task management system to verify these tasks?

Stepping outside of the team, you may need to take a look at your external communications. One clear indicator of a process leak is if you find yourself chasing clients down for payments because your invoicing system is unsuccessful. Also, if it frequently takes your team more than 24 hours to get back to prospects, your customer service ratings are low or sub-optimal, or you’re constantly addressing communication breakdowns, then this could be greatly damaging your business.

It’s easy to get overwhelmed by the number of systems you need to put in place, but really there are only a handful of categories that need to be managed. You should have systems for: lead generation, sales, marketing and business development, hiring, on-boarding and training new employees, operations, customer feedback, and invoicing and payments. Ensuring that you have working systems in all of these categories will save you time, money and oh-so many headaches.

The final area of potential leaks are “pipeline leaks”. This means you have some gaps in your process of getting clients and converting leads. These types of leaks can be life-threatening to your business if you don’t fix them.

The most common “pipeline leaks” occur in sales. If you’re lacking a system for generating new leads or if you feel that you are too busy with current business to address marketing and client acquisition, then you need to evaluate your leaks in this area. It may be that you’re lacking any help or outside assistance to do your social media or lead generation. Eventually, you may find yourself running out of clients and realizing you have nothing in your pipeline.

Many of these leaks occur because of a lack of a clear marketing strategy. A symptom of an unclear marketing strategy is that you have way too many steps in your sales process before you close a deal. If this is the case, you are also likely spending way too much time with non-ideal clients. If these issues are not addressed, your organization will likely take on jobs that are too small or have too small of a profit margin to be sustainable.

There are a number of solutions to address these “pipeline leaks.” One solution is to map out 3 – 4 clear marketing strategies that keep fresh leads pouring in. You should also make sure that your marketing activities are in the calendar every month. Delegating a person who is accountable for these activities and for meeting sales goals will also go a long way. Initiating weekly meetings to check progress on current leads and client acquisition will also lead to greater accountability as well as high quality leads.

Overall , this is only a quick overview to enable you to identify where you might have some leaks, and what to do about them.

When you fix the leaks in your “business boat”, your team will work together harmoniously, the work will get done with maximum efficiency, your customers will come back again and again, and you will feel so happy that you are not doing everything by yourself.

For more information: visit EpicMindConsulting.com