A failing business might feel like a never-ending gut punch. But it’s not over until it’s over. Just because you currently feel like you’re failing doesn’t mean you can’t rebound and be better for it. And while your mind might be buzzing with ideas for how to maintain your staff or reminiscing about the good ol’ days when fear and anxiety were instead excitement and optimism, just know that so many entrepreneurs have been there before. We’ve been there before. So, take a deep breath and read on.
Review everything.
Bottom line: You have to make decisions based on facts. The only way to get the facts is to analyze each area of your business. What are your key performance indicators? Are your measurements accurate? Is your P&L aligned with your projections?
Creating a SWOT analysis can help. SWOT stands for strengths, weaknesses, opportunities, and threats.
- Strengths– What are your successes? What are you doing well?
- Weaknesses– Where are you lacking? What could be better? What resources should you have but don’t? Where could your processes be improved?
- Opportunities– Are there areas of the market you could be taking advantage of? What strengths does your business have that you could leverage more?
- Threats– Who is your biggest competition? What are they currently doing that you aren’t? What weaknesses of your business could expose you to further competition?
We know this is a little overwhelming. Luckily, there are great SWOT analysis templates to make the process easier.
- 14 Free SWOT Analysis Templates
- 10 Free SWOT Templates for Small Businesses
- SWOT Analysis Templates and Examples for Any Situation
Create a plan of action.
After becoming painfully aware that your business is starting to fail, a knee-jerk reaction may be tempting, but it’s unlikely whatever Hail Mary you come up with is a long-term, viable solution. To truly save your business, you’ll need a plan of action.
New strategies
Likely, your business is failing from a lack of revenue. Now is the time to assess why. Poor customer service? Underperforming sales team? Misguided management? Once you’ve determined the culprit, zero in on it like a moth to a flame and create new strategies to revive those lacking areas.
- Focus on retention– Retaining current customers is less expensive than acquiring new ones. Considering 65% of a company’s business comes from repeat customers, they should be a top priority. In fact, increasing retention by just 5% has been shown to boost profits by 25%-95%.
- Change up pricing– Price is the most important factor in the decision-making process. Is yours in line with the current market? Is it hindering sales? Consider making adjustments and then analyze the results.
- Kick your marketing up a notch– It’s time to put yourself on the map. Making less than $5 million a year? Then you should be spending about 7-8% of your net revenue on marketing. Take advantage of PR, social media, content, email marketing, and paid.
- Offer freebies– Prove your worth, offer the use of a product or service for free, or create an enticing promotion. Give people a reason to use your business and hook them with your solid customer service.
Goals
Form new benchmarks. Not only is this a great way to motivate your team but also provides insights as to how your recovery efforts are going. Something isn’t working? Pivot.
It’s important to make these goals small and attainable. You don’t have to make up for all lost revenue in one quarter, for example. It’s more important to be realistic.
Trim the fat.
The difference between simply surviving and fully bouncing back as a business comes down to one key component–cash flow. You need more money coming in than going out. As a failing business, this might not be easy to achieve right now, so it’s time to cut costs.
Ideally, try to avoid eliminating your staff as that will either decrease productivity or overload the employees that retain their jobs. Also, no one wants to fire anyone. So, let’s look at other expenses to eliminate.
- Perks– Consider temporarily freezing company incentives–from small things like catered lunches to bigger benefits like quarterly profit-sharing.
- Shop around– How long has it been since you’ve looked at different vendors? There might be better pricing or special deals for making a switch that could save loads of money.
- Use the freebies– Rather than paying costly monthly subscriptions, look into free resources or versions. Shake, for example, lets you create, sign, and send legal documents for free. Canva offers a free version where you can create social media posts and one-pagers. Lose the bells and whistles and also get Slack for free.
- Halt travel– From food expenses to hotel stays, travel expenses add up quickly. That conference in Vegas will be there next year.
Be transparent…with everyone.
No, it’s not easy to tell your staff the business isn’t thriving. But it’s absolutely necessary. They need to know why certain moves are being made and why strategies are changing. Let your team help you. Schedule a meeting and be honest. Ask for suggestions on strategy and areas where you can cut costs. They are committed to the business too and might have brilliant ideas to share.
Yes, even the creditors
Hiding your current situation isn’t going to make it go away. Instead, make your bank and creditors work for you. Remember, it’s in their best interest for you to succeed. Tell your bank about your cash flow issues and ask for options. Look into interest-free credit cards or an option that comes with cash back or rewards. Consider opening a checking account that’s offering perks for new customers.
Don’t forget your clients
Most importantly, don’t forget your clients. While you don’t need to tell them you’re failing, you should make them aware of any changes that might affect them. Especially if it’s beneficial. For example, are you offering freebies or promotions to boost revenue? Give your current clients the inside scoop. This can only strengthen your relationship.
Don’t be afraid to ask for help.
Put your pride in the storage closet and grab your resilience. You’re not the first business to see declining numbers and you won’t be the last. It’s how you react that matters. So, get informed. Learn as much as you can about building a business back up. Lean on friends, colleagues, and mentors for guidance. Entrepreneurial Landmines by business connoisseurs and mentumm accelerator founders, Tom Healy and Joe Buzzello, is a great place to start. Navigating the treacherous landscape that comes with trying to scale your business can be challenging, but Healy and Buzzello help you avoid major mistakes and missteps along the way and give you the tools to build faster.
This is the part where you fight to stay alive and bounce back with a renewed passion and appreciation for what you do. This is where mentumm accelerator can step in to help you through it, come hell or high water.
It Starts Here
Author: Joe Buzzello & Tom Healy
Joe Buzzello & Tom Healy are the Co-Founders of mentumm and have a shared mission to help entrepreneurs grow faster and have a greater impact on the world.