• February 2, 2023

Top 3 Avoidable Ways Your Business Loses Money

The nature of a business means you are going to see some money loss now and then. This can happen in the beginning, when you invest lots of money starting your business and struggle to see initial returns. It can happen again with new product ideas or expansions, and so on. Things like this are unavoidable; they need to happen if you want your business to grow. A loss of money here means you end up making money later on. 

At the same time, you will come across avoidable ways to lose money. Here, we’re looking at things that have no benefit for your business and could’ve easily been avoided. In short, you’re losing money when you don’t have to. With that in mind, here are the top three avoidable ways you’re losing cash: 


Lawsuits are always avoidable, especially in a business sense. Think about some of the ways you might be sued. A common instance is a worker that gets injured. This happens far too often on construction sites or factories, meaning you pay loads of compensation after a construction accident lawyer comes knocking at your door. 

Another common example is a customer that gets injured or falls sick as a result of your business. Perhaps they were hurt on your premises or one of your products malfunctioned and injured them. Regardless, they can sue you for a lot of cash. 

Other lawsuits include copyright claims, malpractice, etc. In every case, you could and should avoid a lawsuit if you take the time to consider the law before doing anything. 


In many cases, you can’t avoid losing a bit of money to marketing/advertising. Some ideas and strategies take a few weeks/months before they start generating returns. 

That’s not what we’re talking about here. We’re on about marketing/advertising expenditure that continuously makes no money and drains your business. How is this avoidable? By running audits and analyzing your campaigns. Understand what marketing methods do not make money, then stop investing in them. It’s arguably the easiest and most avoidable way to lose money. 


According to a study by the Society for Human Resource Management, it costs an average of $4,129 to hire an employee. This covers things like advertising the post, conducting interviews, onboarding, etc. 

Again, like marketing, you can’t avoid losing money when initially hiring employees. Once more, they end up paying off your investment in the long run. Avoidable money loss from hiring/onboarding refers to a terrible turnover rate. People are constantly quitting their jobs, meaning you have to replace them. This bleeds money and is 100% avoidable; just provide a better work environment. Make people want to work for you; pay them fairly, promote from within, offer bonuses, and develop a great employee benefits package. This keeps people at your company for longer, preventing money loss through constant onboarding. 

It’s critical to be aware of the avoidable ways your business loses money. Addressing these three issues is the ideal way to start. Stop losing money when it can be avoided, and your profit margins will look a lot better.

A pretty interesting post, huh?

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