As a business owner you will know periods of success and periods of struggle. As long as the economy keeps fluctuating, you can expect your business to wax and wane. But what about a more severe knock to your company – one that questions whether the business will continue?
There are many causes of business failure – low levels of sales, bad management, inadequate planning and more. Sometimes it can be difficult to identify what is causing the downturn. An important first step is to evaluate every aspect of your business to identify key areas for change. Then you can get down to implementing measures to bring your business back to life.
The business plan
When you started your company you had a business plan. It served you well in the beginning, but that plan may no longer work in today’s markets. You need to create a new business strategy that incorporates direct and focused ways forward. That plan should include long-term goals for sales targets and market share, but it should also develop practical and immediate ways of turning things around. Do some research on your competitors – especially the successful ones. You may discover great insights in their approaches to business. Consider hiring consultants who can help you devise your company’s resurrection strategy.
Another key aspect to address is your company financial structure. Are there places where you can cut costs? For example, instead of company travel, many communications can be accomplished online. For necessary travel, consider austerity measures like traveling coach instead of first class.
Another finance area to address is improving your cash flow and reducing your debt. One method of improving finances is to divest your assets. According to Bloomberg, the Noble Group, under the leadership of CEO Yusuf Alireza, sold one of its businesses in order to adopt an asset-light business model. This model helped improve the company’s cash flow and its debt load after its shares plummeted.
These measures may not completely resolve the situation, but they may keep your company from insolvency or having to seek outside funding.
You know your business can’t run effectively without the best people and a good work environment. You can maximize your workforce by outsourcing, getting rid of low performers, and training current employees in new skills. For example, if your company has sold nuts and bolts since 1970, you may not be taking full advantage of the technological revolution. This is where you can bring in fresh eyes from outside the company to create an effective social media presence.
Your employee evaluation must include an assessment of whether your people can quickly and capably make the necessary changes your company requires. Without your team’s support and competence, your revitalization plan won’t fly. Keep your employees up-to-date on the new plan, the reason for the changes, and their specific roles in the transition. But also consider new hires to inject different perspectives or improve a negative employee culture.
The customer base is the lifeblood of your company. Your plan needs to direct your energies into customer satisfaction and cultivation. Your current customers are potential sources of increased business, so offer incentives to encourage them to buy more, and more often.
You also need to build your customer base, and you can involve your current customers in this, which gives them a sense of investment in your company. For example, you can offer discounts for customers who repost Facebook updates. Many companies offer customers rewards for customer referrals. These methods are all free, and relatively easy to implement.
Without good products, there’s no point in taking any other steps to revive your business. If you are using manufacturing techniques from the 80s, you may be missing an innovation that will increase both quality and production time. But manufacturing isn’t the only part of the equation. You also need effective marketing of your product.
Product strength is one area where researching your competitors might help. One company may be doing well simply because they have better equipment. Another may be thriving because they have a marketing campaign that drives and converts clients. In a side-by-side comparison, you can see where you are different and less effective, and take steps to upgrade, update and better market your products. Obviously, this may mean finding funds to make equipment acquisitions, so in your planning you need to balance the financial costs against the potential gains.
It’s not easy to bring a business back from the brink. It takes decisive action from strong leaders, and it takes commitment to people and products. The investment is well worth it.