Tips to turn around a struggling business
A business downturn is the beginning, not the end. It gives you the chance to learn, start new, and rebuild. If you look closely, there are a few signs associated with a failing business months before it happens. Some of these signs include a halt in growth, poor cash flow management and a glaring lack of innovation or differentiation.
The first thing most business owners do to try and save their business is cut costs, but that only slows down the inevitable. What you need to do is breathe new life into a dying business by jump-starting it.
Here are a few things you should do to save a failing business
- Change your mindset
Before you do anything else, the first thing you need to do is change your mindset. When your business is struggling, it’s easy to feel hopeless and look at the glass as half empty. But if you want to make a comeback, you have no other choice but to change your mindset. We know, easier said than done. Especially when your inner voice keeps sending you negative messages like ”you’re going to fail”, “you don’t have the courage to take that kind of risk”, or “there’s no point in even trying anymore.” The negative inner voice has to be silenced ASAP. A positive, flexible mindset will help you take on the other things you can do to save your business, improve your well-being, and increase your confidence.
- Perform a SWOT analysis
A SWOT analysis is a strategic exercise you go through to identify your small business’ Strengths, Weaknesses, Opportunities, and Threats. It’s a helpful exercise you can use to analyse your current performance, identify things that are going wrong (problem with product-market fit, pricing, operational processes, etc.), and discover areas where you can make improvements.
- Understand your target market and ideal client
The more you know about your target market and ideal client, the better you will be able to understand where you should focus your efforts, the needs and pain points your product or service can solve for clients, your target clients’ buying behaviour, and develop a strategy that’s the right fit for your business.
- Set SMART objectives and create a plan
Make a list of your SMART objectives for your business. This will give you clarity and make it easier for you to stay focused and work towards achieving them. SMART stands for:
– Specific: Clear enough to fully understand
– Measurable: Can determine when it’s complete
– Achievable: Can be accomplished
– Relevant: Is connected to your overall game plan
– Time-bound: Has a deadline with specific dates
Next, create a plan that will put your SMART objectives into action. As you create a plan, think about the steps you will need to take, how long it will take, and who will help you.
- Reduce costs and prioritize what you pay
To keep your business open, most likely you will need to “trim the fat,” or reduce costs. Start by cutting discretionary, or unnecessary expenses. Then, look at areas where you can cut cost like travel expenses or reduce your utility usage to lower your monthly bills. If you are renting office space, talk to your landlord to see if they would be willing to reduce rent or renegotiate your lease. The last place you will want to cut costs is people. If you find yourself in a really tough spot, try reducing employee hours and compensation before laying them off.
- Manage your cash flow
A number of small businesses fail because of cash flow issues. It probably comes as no surprise that without consistent cash flow, businesses will eventually dry up and end up failing. Create a cash flow forecast so you have insight into what’s coming in and what’s going out. Use the forecast to project likely sales and expenses, so you know how much money you are likely to have in your bank account. You will also want to manage your cash flow more efficiently by sending invoices out on time and following up with customers who haven’t paid.
- Talk to creditors, don’t ignore them
If you are like most small business owners, you probably have debt to pay. Many business owners see debt as a sign of failure, but in reality, small businesses who have debt have higher credit scores. Try not to feel too overwhelmed by outstanding debt or avoid creditors. That only makes matters worse. Instead, talk to your creditors and explain your situation and your plans to pay your debt. Most creditors are understanding and willing to work with you if they are confident you will eventually pay what you owe.
- Organize your business
Many times organization is often overlooked by business owners. Lack of organization not only results in measurable losses, like lost time and money, it negatively affects your business reputation, adds a significant amount of stress to your life, and makes it difficult to work efficiently. Taking the time to organise your business will not only help you save time in the long run, but it will also help you breathe easier, lower your stress levels, and free up time spent on organizing so you can do great work.
- Stop wasting time on repetitive tasks
Small business owners have a lot on their plate, no doubt about that. There are a lot of repetitive tasks that go into running a small business. Tasks that take up a lot of valuable time when they are done manually. When repetitive tasks are automated, it saves money and frees up time to work on growing the business.
- Always focus on your clients
Keeping clients satisfied and happy has never been more important than it is today. We live in a world where people demand more, and if business owners don’t meet increasing expectations, people will voice their opinion on social media and go elsewhere. It’s a hard fact, but that comes with running a business nowadays. When running your own business, it is important to surround yourself with like-minded people that know and understand how to operate a business and nobody else understands the kinds of issues that you face as an entrepreneur, like other entrepreneurs on MAKETE’s platform, especially during this COVID-19 period.
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