Top 5 Profit Killers of Every Business

Every entrepreneur, CEO, or Chairman of the Board is in business to make money.

However, there are a number of profit-killing issues that, when not addressed, will destroy customer loyalty and profits.

Here is a small sample of the top five profit killers in business:


The old saying, "the customer is always right," is only partially accurate. Sometimes demanding customers are people who do more damage to your profits thans good because you and your employees will spend more time wasted on their demands and end up with an unhappy customer no matter what.

However, good customer service has become a thing of the past. So often, I find myself annoyed because employees appear to have attitudes that they are only working for the paycheck and are painfully dragging themselves through the day so they can go home, where they really want to be.

Good customer service starts with a smile, a greeting, and an attitude of gratitude by your employees. Managers must reflect this attitude and incent employees to provide good customer service.


We all know that employee salaries and inventory are usually the largest line item on our budget. With salaries, growing benefit costs, insurance requirements, risk management, and more, employees are the most expensive factor in eating up our profits.

Business owners can't grow their businesses without the help of employees. As owners and managers, we use employees to duplicate our efforts so that we can focus on other needs or work on growing the business further.

However, disgruntled or under-appreciated employees will be an even bigger burden to the profit of the company. That is why it is wise to invest more than just a paycheck or throw some health insurance benefits their way to keep the employees happy. They are walking billboards of your company, and the first line of sales people for your business.

If Jane works for you and she's not happy, she will not promote your business in a positive way, which in turn will deflect customers and potentially new clients. Make your business the envy of the town by becoming the best place to work for employees, and you will notice a massive increase in your profits over time.

People want to support businesses that support people. Even if their product or service costs a bit more than the competitor. You take care of your employees and word will get around, and customers will be drawn to you, resultiing in increased loyalty, customer satisfaction, and profit.


When small business owners start out, the first people they recruit to work for them are usually family members and friends. What seems to be a logical, inexpensive option, will more often than not turn into your worst nightmare!

And not only will it impact the work environment, it will bleed into your home life and personal family relationships.

My advice is do not hire family and friends if you plan on keeping them in your personal life. Family and those closest to us tend to not follow instruction well, obey the rules, and eventually feel like they can be the boss. Or they try to pull rank with other employees because they are related to you, the owner.

Instead, if you need inexpensive labor, try recruiting at the colleges, hire an intern, look at temp-to-hire agencies for a short-term need, or hire a high school kid for the summer. Groom them and grow them from the ground up and you'll create the person you're looking for. And if it doesn't work out, you each go separate ways and you're not getting a divorce over it or avoiding future holiday dinners with the family.


The more people see your logo, business, image, or service being offered, the more customers you will generate, right?

Not necessarily. Times have changed. People are not as interested in advertising as they once were, and technology has made it simpler for people to avoid advertising.

After all, TiVO and DVRs now make it possible to fast-forward through commercials, newspapers are all virtual and virtually non-existent in paper format, and people can now ignore the internet ads. So, what's left?

How can we market to a target audience without it costing a ton of money, eating away at our profits?

Just as technology has helped virtually eliminate old marketing strategies, it has paved the way for much more affordable and successful options such as word of mouth through social media networks, affiliate programs, inexpensive websites, mass email solutions, and much more.

We can meet a much larger and broader audience than ever before, without it costing us an arm and a leg. Newspaper advertising is archaeic and outdated. Look at free advertising offers through Google, Bing, and social media networks.

And don't forget the best form of advertising that's FREE - word-of-mouth referrals from satisfied customers. But, you have to ask for it. Don't just assume your satisified customers are going to automatically market for you. Incent them or simply thank them for the referral, and you'll get a better response.


Theft is one the top profit-killers in every business. Theft of time, money, products, merchandise, etc., either by so-called customers or employees can do a company in.

Keep on top of the books and make sure no employee has access to bank accounts, etc. without some form of accountability and security in place.

Makes sure you have security in place for merchandise, whether it is an electronic monitoring device, security cameras, a security guard at the main entrance, or whatever works best for your situation. Just find a way to protect your profit.

For additional information on Profit Killers for your business, please contact us to speak with one of our consultants and we'll be happy to help you evaluate your needs and offer assistance in increasing your security and profit-building success.

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Leo Pacheco | Personal Development | Life Coach | Innovative Strategist