Overtime profit leaks can create a big hole in your business finance, there are several ways of blocking leakages, however, it is important to identify the causes.

Knowing you have profit leaks is the first step. Initiate the following steps to prevent further leakages while you investigate as well.

  • Meet regularly with your staff to review reports.
  • Have financial benchmarks.
  • Compare what’s happening this year to what happened last year.
  • Determine what’s normal in other business.
  • Audit business finance regularly.

Profit Leaks can be found it the following areas


This includes paper, inks, stationary and more, wastage can be curbed by deliberately monitoring or setting up a monitoring mechanism to avoid waste.

Associate Technology Expenses

In a bid to communicate with customers, waste can be generated, this can happen if you keep paying for mails of accounts that are closed, dormant, or non responsive, also card processing fees for low fee products and the likes.

Insurance and shipping

Cost of postage and shipping can eat into the profit, while this can be partly addressed if emails and faxes are used. also insurance cost can mount quickly especially for items not necessarily needed by the company.

Excess Human Capital Overhead

This simply means you taken more than you need, it may be high time you perform staff audit. Evaluate staff appraisals, training results and outcome among many other things.

Not Divesting from a Lose Leading Sector or Business

Lose can be recorded by any sector of a business, however, if it happens over and over it becomes a real problem. It better the management team sits and evaluate the future of such area of their business to cut loses and possible waste.

Other areas include:

Employee theft

High cost of supply and purchase

Inefficient process

Poor bargaining skills or overpaying for services

Low income or poor pricing techniques

High cost of rent

Poor customer engagement

Leave a Reply

Your email address will not be published. Required fields are marked *