Lifelines That Could Save Your Failing Business
When businesses showing signs of distress or a straight-up tanking, The first thing most business owners do to try and save their business is cut expenses, but that only slows down the inevitable. Some even go to the default setting of trying to find new customers, sign new deals, and build the company on the back of this steady stream of new business.
With most of the global economy still on freeze, Business owners across the globe are currently at a dilemma of whether to forge ahead or give it all up.
Now, before you give up on your business, you owe it to yourself (and any employees) to devote some concentration on some concepts that can help you revive your failing business.
- Know what is going wrong.
Plenty of business owners seek positive input from customers. You also should create a system to collect negative feedback. When things go awry, this is usually where you can learn a large part of the “why" behind it.
- Be objective.
Business owners often are unable to separate themselves from their companies. You are not your business. Coming to terms with this will help you be more objective and keep your head in the game.
Some ventures fail due to irresponsible owners. You can't afford to eat up profit simply because your name is on the paperwork. Reach an understanding of salary review for yourself and staff members to determine what's viable at this time.
You also must be willing to ask questions. You aren't the first person who's experienced this phase of business. When my second business was failing, I sought advice from a colleague whom some might have considered less experienced or influential. Yet my company's salvation came as a direct result of that objective action. Reach out. If you need to, engage a professional business consultant.
You are not an island, and you don't hold all the business knowledge even about your own venture. Be open to new ideas. Yours may be very good, but they aren't the only way to achieve success. You might find out that your bright ideas don't always translate into the real world.
- Invest in your team.
Your team has played a significant role to get your business to this critical point. Now, more than ever, you need to transform your staff into an asset. It's possible your employees don't understand your business model or the business itself. Some might be barely there for the paycheck. This isn't good for any business.
Nothing grows a business like having a dedicated team whose members commit themselves to its success. Your employees must believe they are committed stakeholders and an active part of the business. By extension, your executives must become master salespeople.
As the saying goes, two are better than one because they receive a better reward for their labor. You'll be shocked at the magic that can be worked by a determined group.
- Crown your customers.
Pitch what your customers want, not what you feel like selling. Remember your business exists to offer services that resonate with your clients. Demand and supply remain the crux of economics. Your business survival depends on knowing your customers and fulfilling their needs.
Make client satisfaction a key priority. Invest in an extensive and encompassing market survey. Engage your customers to discover what they truly want from your business. Then align your product model and marketing plan to suit their demands.
Your business won't survive solely on existing customers. To grow your income, you need to add new clients. Create awareness for your product by investing in low-cost advertising methods. Meet people one-on-one if you must in fact, depending on your industry, you should be doing this anyway.
- Go back to the drawing board.
Return to the root of the problem. There must be reasons why you are where you now find yourself. If you've started collecting data and monitoring negative feedback, you should have more than an idea of the true causes. Now, what can you do about it? Go back to the proverbial drawing table and ask yourself some hard questions. Are you paying out more in salaries than your incomes can carry? Do you need to lay off some staff, make adjustments to compensation packages, or consider other cost-cutting measures?
Redefine your value proposition, if you deem it necessary. It could be that the very thing setting you apart from other businesses in your marketplace is a reason for your failure. Consider following the working trend, if only as a marketing test. Being different isn't best in every circumstance or space.
Carefully set new goals that are clear, definite, and specific. Craft a few, as chasing too many objectives at this point will not help you right the ship. Your business needs more cash flowing in, so your immediate goals should revolve around marketing and bringing in sales as quickly as possible.
It's also worth researching whether you might qualify for a grant. Federal, state, county, and even local development programs exist because these agencies and organizations have a deep interest in fostering small businesses.
- Make a plan for your assets.
If your business fails today, your company's assets may be your only consolation. Assets are meant to yield money for your business, and that shouldn’t change in the midst of dire circumstances. The money you could realize from trading these assets might be the lifeline you need to stay afloat.
You can lease out buildings and core machinery for a handsome fee. At this point, you'll definitely feel the temptation to sell, but don't make the decision as a knee-jerk reaction. You could lose out big, and there is no shortage of people who are waiting to capitalize on such a costly mistake.
- Think beyond the account
We’re in uncharted waters, but we know where the solution lies: our existing customers.
Even before the pandemic, more than 72% of sales leaders said they didn’t believe they were getting everything they could from existing accounts, according to Gartner. This, despite the fact that business acquired from existing customers is six times more profitable than that from pursuing new customers, according to Bain & Co., and that salespeople are seven times more likely to win business from an existing customer than they are to actually capture a new logo.
This new reality reinforces the value of the customers you already have, but it also calls for a new approach in selling to them that goes beyond what most salespeople have been doing.
Because selling to a new customer is incredibly resource-intensive, most companies still follow a campaign strategy that includes an ideal customer profile, a buyer’s journey, lead generation strategies, and more. If you don’t have alignment between marketing and sales and customer success all of the time, the investment that goes into just getting that initial foot in the door is wasted. There are reasons why two-thirds of first sales calls fail to get to a second call, and most of them come down to not knowing enough about the potential customer and what problems they’re trying to solve.
When you know your business is on its last legs, you need to be proactive. Don’t sit back and wait for things to happen before you take action. Take actions that are not only preventative (before things get any worse) but that also fix glaring problems.
There’s no better feeling for an entrepreneur than when he or she is able to turn something around for the better. Every entrepreneur is faced with challenges and a failing business is just one of many. Even if your business fails, despite all of your efforts, take it as a learning experience. Many entrepreneurs before you have had many failures before their most successful venture. You only need to be right once.