Many businesses experience a downturn – for most, it’s part of the journey. These periods are learning opportunities that you can use to start fresh and rebuild. But it takes resilience, strength of character and some food strategy to do this. The solution is more complex than simply attempting to cut costs.
In this article, we will offer some tips to help give your dying business a jolt of energy to get back on track.
What causes businesses to fail?
According to AdvisorSmith, 22% of businesses fail in the first year. Moreover, 32% fail within the first 2 years and 40% fail within the first 3. With the knowledge that so many businesses only last a few years, what are the main reasons for this?
- Finances: When expenses exceed funding/capital, it can be difficult to turn a profit. Slim margins and little cash on hand lead to a high chance of failure.
- Planning: Businesses that don’t have a solid business plan before beginning operations may be ill-prepared for their market. This can lead to problems that could have been avoided with adequate preparation.
- Management: Many passionate business owners lack skills for things like HR and management. It can be challenging to work with employees – it requires a specific skill set. A strong manager makes a big difference.
- Marketing: Marketing is extremely important and challenging to get right. Marketing plans help establish budgets and generate a rapport with your potential customers. Failure to market your business correctly can easily cause failure.
10 Tips To Turn Around a Failing Business
Here are some tried-and-tested steps you can implement to turn your failing business around.
1. Develop a Growth Mindset
Mindset lays the foundation for everything you do. You need the right intentions, incentives and values to trigger actions that will push you in the right direction. You can develop a growth mindset by:
- Learning from mistakes.
- Being flexible and seeking advice from others
- Focusing on personal growth through reading, hobbies and anything else that inspires you
Hard work is important, but you need to stay happy and confident to achieve.
2. Set Your Goals
You can focus and sustain momentum by setting achievable goals that lead towards getting where you need to be. Goals help filter out the noise and look towards specific results. It can help boost your motivation and confidence, but it’s important to start small.
Growth is about progress. You will have big goals, but you get there by achieving a string of smaller ones.
3. Understand The Problems
Why are your customers leaving you? It’s not uncommon for customers to shop around, but your task is to make them choose you. There could be many reasons why they are leaving your business:
- Poor customer service.
- Products don’t meet expectations.
- Overly-aggressive sales tactics.
A feedback system for your customers can be a great way to collect data about how they feel towards you. This will help you establish what they want and work to better meet their needs.
4. Identify Your Target Audience
Your target audience is the people that your marketing efforts are designed for. You need to have a rock-solid understanding of who they are for you to gain customers and bring qualified leads to your business.
Whatever your product is, you can find the target audience by carrying out surveys and examining who buys from your closest competitors. There are various other techniques to studying customer archetypes – make sure you are making the effort to understand who you are selling to. You might think you know your target market but without proper research you could be missing the mark.
5. Consider Digital Transformation
The data your business takes in is valuable if it can be analysed thoroughly. There are tools to do this, and there are also resources that can implement automation to reduce the time it takes to carry out many tasks. By investing in digital transformation (it can be more affordable than you think) you could access huge benefits that boost your profits.
ERP software is one solution that can do all of this for you. Gain greater control of your finances, get real-time visibility of your profitability and access analytics that help with decision-making. A small investment could lead to big returns from efficiency gains and customer retention.
6. Carry Out a SWOT Analysis
A SWOT analysis means taking an honest look at your:
This pushes you to take different perspectives to look at your business. These will help you identify the problems that need to be tackled. From here, you can begin to strategise and set specific goals to address the problems you discover.
7. Get On Top of Your Finances
There can be many issues in a business that relate to finances. Cash flow, high turnover, debt…these problems are preventable but they can still arise. If money is your biggest issue, you will need to re-evaluate your expenses and outgoings. Keep track of finances and you will catch issues early to reduce their impact.
This is another thing that software can help with. Good ERP or accounting software can flag areas for concern and even suggest solutions to help you stay on top of things. It’s also advisable to make sure you do a month-end close as routine. Some smaller businesses wait until year-end, but by then it could be too late and issues which could have been spotted have already had a detrimental effect.
8. Consider a Change of Course
A change of course can mean something different for different people. It may mean making alterations to your business model. Or it might mean switching to an entirely different vertical or targeting a different type of customer.
Whatever works best for you, it may be necessary to make some changes to resolve your problems. Whether pressures come from internal issues or external factors, it’s important to be honest about what your business needs. Big changes can be challenging, but they are better than allowing your business to go under.
9. Don’t Fail to Take Action
Being proactive is the key to rescuing a failing business. You can’t afford to sit back and wait for things to happen. Being proactive can enable you to nip problems in the bud. But if it is already too late for this, it can help you be innovative and creative in finding solutions.
Use your people and work with them to find the right solutions. Very few problems are beyond solving, but you need to take the right actions and be determined.
10. Try To Stay Positive
Often easier said than done, especially when things aren’t going to plan, staying positive in your approach to fixing your business can play a big part in whether your efforts are rewarded. It’s important to be realistic at the same time, but a balance of the two can go a long way.
Remember that your mental and physical health are more important than money. Try to eat well, get the sleep you need, exercise if you can and you might find everything starts to fall into place.
Why choose Eventura for your digital transformation journey?
Eventura have been helping businesses in their digital transformation journey for two decades. From the implementation of industry-leading ERP solutions such as Sage 200 and NetSuite, to helping them move their entire operations to the cloud and away from costly and restrictive on-premise solutions.
As well as being NetSuite Solution Providers, Sage 200 Partners and Microsoft Gold Partners, we also offer a wide range of managed IT services, meaning we can take your business as a whole and help it achieve digital transformation.
If you would like to speak to one of our experts, you can request a free call back here.