As the number of thefts and break-ins continue to increase, it is apparent that effective loss prevention policies in companies should be put in place, and security workplaces should be taken seriously. According to Statistics Canada, in 2022, the shoplifting rate had a sharp increase of 31% compared to the year before.
Moreover, RCC, the Retail Council of Canada, further mentioned that some members even experienced a 300% rise in thefts as compared to 2020, which adds up to a total of $5 billion a year in losses. In addition, there were 6,983 more break-and-enter crimes than in the previous year, representing a 5.55% increase over the past year.
The figures serve not only as a source of urgency to adopt security measures and loss prevention methods but also to protect business assets and ensure the smooth running of business operations. Appropriate security measures like strengthened physical security, advanced surveillance, wide-ranging training of staff on security protocols, and restricted access are the basis. It works not only as an external protection measure but also tackles internal risk factors like employee theft and fraud that can harm your business if not controlled.
This article explains the major causes of business profit loss and the importance of loss prevention strategies for profit-making businesses.
Common Causes of Business Profit Loss
Businesses from different industries are exposed to different issues that can lead to a decrease in profit. Through the knowledge of these shared causes and statistics, businesses can adequately develop strategies to reduce exposure.
Theft
Shoplifting and employee theft are two of the leading causes of theft and a great challenge. Retailers, on average, have 61.7 billion dollars in shrinkage annually. Theft by employees makes up approximately 30% of these losses. Besides, the construction industry is very vulnerable, with 21% of sites being victims of equipment theft every week while only 25% can be recovered. Hence, it is important to implement stringent security measures to contain this problem.
Fraud
There are different types of fraud, such as payment fraud in retail and billing fraud in healthcare. Statistics show that businesses lose 5% of their annual income to fraud, so internal control should be rigorous, and audits should be performed regularly.
Poor inventory management
46% of small-to-medium businesses use the manual method or don’t track inventory at all, resulting in the issue of overstocking and understocking, which is detrimental to their profitability.
Moreover, these techniques carry a high possibility of mistakes and insecurity. Adopting a better inventory management strategy and security solution would help these companies make the process more efficient and less vulnerable to losses.
Property or Product Damage
Deliberate sabotage or vandalism can cause high expenses. For instance, product damage accounts for 34% of the returns resulting from packing. This is a point of revenue loss that e-commerce businesses can not ignore. Moreover, substituting a damaged product with a new one can lead to as many as 17 times more expenses than the cost of shipping the product in the first place, highlighting the apparent money loss.
Effective loss prevention strategies that emphasize the security of products and property can decrease losses and save the business from a lot of trouble. Furthermore, this can improve the customers’ satisfaction.
How Loss Prevention Strategies Can Help Your Businesses
Loss prevention is a crucial part of business operations that helps a lot by providing tangible benefits such as satisfied customers and lowered theft and damage to stocks. These strategies play a major role in the complete security plans designed to reduce the losses incurred by the business. In the following section, we will discuss how loss prevention measures can benefit your company.
Increased Profit
Protecting Human Lives
Implementing security measures like CCTV in businesses is not only a preventive measure against theft but also for protecting human lives. The surveillance systems, including cameras and others, help control and lower workplace accidents.
For example, in 2020 in Ontario, there were 22 occupational health and safety incidents in the construction industry. By focusing on loss prevention, businesses can protect their workforce and attract more employees, increasing productivity and revenue.
Minimizing Operational Disruptions
As loss prevention for businesses is a key aspect of business activities, it helps minimize the disruptions that can result from theft, fraud, or other security incidents. These disturbances may result in a change in daily processes and affect the workers’ productivity, which in the future can lead to a loss of output.
By introducing the concept of Mobile Patrol Services, the premises can be watched in a real-time manner, early detection of potential threats is made, and the threats can be responded to quickly, ensuring smooth and uninterrupted business operations.
Enhancing Investment Security
Business loss prevention helps to save a company’s money spent on buying stock, equipment, and technology. Event Security Services powerfully facilitate the protection of valuable assets in cases of a high-profile event or launch, where the probability of theft or vandalism is drastically higher.
Such a protection mechanism not only minimizes the financial setback but also provides the needed resources for business expansion and development.
Reducing Insurance Costs
An efficient loss prevention plan for businesses could cause insurance companies to lower premiums since the risks of theft and damage are drastically reduced. So, insurance companies usually charge less to businesses, which are the ones that take a proactive role in securing their operations.
Undertaking comprehensive security measures such as Fire Watch Guard services during critical times could also reduce the risks, which will be a plus for your business regarding insurance coverage.
Safeguarding Brand Image
The brand image is the number one element of customer trust and overall business success. Business loss protection is an important aspect of the business image, achieved by preventing incidents that can affect the business’s reputation. By having a solid security system, you can protect your business and build a positive reputation for yourself.
Flexible Monitoring Options
Flexibility while running security operations is essential for modern business. Through Flexible Patrol Options, the security system offers businesses a choice between live onsite and remote offsite guards. This way, it becomes possible to secure a business cheaply and effectively. This adaptability of security is at the center of meeting the needs of the growing threats or business expansion.
Early Detection
A strategic loss prevention plan for businesses must include early detection of threats and preventing extensive losses before they escalate. Proactive Loss Prevention systems are designed to instantly identify and fix problems instead of using reactive measures and initiating the possibility of business disruption and financial issues.
Quick Response to Incidents
Rapid response is a key component in reducing the consequences of security incidents. Rapid Alarm Response guarantees that all alarms are met with instant actions, thus giving the shortest response time. This fast response ability can be the game changer between a minor incident and a major security event.
Improved Customer Satisfaction
Implementing effective loss prevention measures, such as security guards and cameras, enhances customer satisfaction by stopping theft and damage to products and property, increasing consumer confidence and loyalty.
Final Words
The sustainability and profitability of any business can be ensured only if loss prevention is done correctly. Through the implementation of efficient loss prevention strategies, businesses can secure their assets and minimize financial losses, which in turn helps to maintain a better reputation among customers and within the market. Nonetheless, comprehensive security and risk management is a measure that requires professional assistance. This is where G Force Security fills in the gap. G Force Security has a proven history of providing security services tailored to the client’s needs and modern loss prevention solutions. G Force Security guarantees your business will be well prepared for any security issue. By teaming up with G Force Security, you not only protect your business but also demonstrate your dedication to the high-quality standard of asset protection and profit safeguarding.
