A monumental 90% of startups fail!
This rate is nothing short of alarming, with a staggering 82% of them failing due to cash flow problems. In essence, you’re not the only one going through a rough patch. Running a business is not an easy feat, and sometimes, your business will get in trouble, and you’ll find yourself in a cash crunch struggling to make payroll or pay your bills.
However, it may have come to the point where you feel that your struggling business is on the brink of sinking, and you’re fighting to keep everything afloat. How do you weather this storm and save your business? How do you work your way up to the 10% that makes it?
In this post, we’ll guide you through all the steps you could take that will help you save your struggling business.
Change Your Mindset
Before we get to the nitty-gritty details of saving a struggling business, it’s essential first to address your mindset. When you feel like your business will fail, you stop trying and start thinking that there’s no longer any point. However, regardless of whatever situation you’re in, there’s always a possibility that you can save your business.
The trick here is to acknowledge your problems and take charge of the situation. When facing business trouble, you need to have a positive and flexible mindset that will open all options. Saving a business is much easier when you’re confident that you can do it.
Perform a SWOT Analysis
A SWOT analysis is one of the best strategic exercises you can perform, as it will help you identify your small business strengths, weaknesses, opportunities, and threats. This is an incredibly helpful exercise that you can use to analyze your business's current performance, identify what’s wrong, and eventually help you discover the areas that you can improve it.
For instance, you may find that you have been marketing to the wrong target audience or have a problem with the pricing and operational processes. This means that you should go back to the drawing board and research your key target markets and rectify any other following problems business.
The more you know about a target market and your ideal clients in any business, the better it is to provide the products or services they need. This will lead to a large customer base and business growth.
Create a Strategic Plan Using SMART Objectives
At this point, you need to make a list of your SMART objectives. This will give you clarity and help you focus on the most important part of the business. SMART stands for specific, measurable, achievable, relevant, and time-bound.
This means that you need to have clear goals that you can measure and goals relevant to your overall game plan. Goals that you’re sure you can achieve and then strive to achieve them in a given time period. For example, you could set an objective to increase sales, but you need to know by how much, whether it’s achievable, whether it contributes to your overall goal, and by when you need to achieve it.
The trick here is to be very specific about your goals, make sure it’s quantifiable and realistic. Saving a struggling business may take some time, but if you’re strategic about it, it will undoubtedly happen.
Reduce Costs and Set Priorities
To keep your struggling business open, this is the point where you need to trim the fat. Technically this means cutting costs that are discretionary or unnecessary. Look at all your business areas where you can cut costs like travel expenses or utilities that you don’t necessarily need that could lower your monthly bills.
Check whether you can move to a smaller office or re-negotiate your lease with the landlord. Depending on how tough of a position you’re in right now, consider whether it will be better to reduce employee hours and compensation or if it would benefit the business if you laid off a few of them and only leave the essential ones.
Manage Your Cash Flow
Now, to the most important part of running a successful business. Any business will eventually dry out without consistent cash flow, so you must create a cash flow forecast. You need to know what’s coming in and what’s going out because this will help you project possible sales and expenses.
It would help if you started sending invoices on time and following up on customers with delayed payments. Bookkeeping is vital to business success, so it would help to have bookkeeping software to assist you with all these tasks.
Don’t Ignore Your Creditors
If you don’t like most small businesses, there’s a high chance you have a loan or two, and one of the most important things you can do when saving a business is talking to your creditors. Try not to avoid your creditors for feeling overwhelmed by debt, because that will only make things worse. Instead, talk to them and explain your situation and any plans you have of paying what you owe.
It’s easier to get out of debt when you’re not trying to hide from banks and other creditors. Most creditors are willing to listen, understand, and work out a plan to help you pay all your debts.
Organize Your Business
You’d be surprised at the number of businesses that overlook organization. If you’re a part of that group, then it may also come as a surprise that lack of organization always leads to measurable losses like time and money. It can make it hard to conduct business efficiently and add a significant amount of stress to your life.
Take the time to organize your business and automate any repetitive tasks that will save money and free up your time. In turn, you can focus on the most important aspects of saving your struggling business.
Focus on Your Clients, Always
Last but definitely not least, it’s incredibly important that you keep your customers satisfied and happy at all times. This will be their incentive to come back for more business.
Once you understand your target market and what they need, take the liberty to provide them with excellent services or products. Exceed the expectations, and make sure your competitors have no chance against you.
How to Save Your Struggling Business
It may seem like you’re running a struggling business that’s on the brink of collapsing, but this doesn’t mean you can’t save it. Change your attitude, and utilize the steps above to save your business. These tips will help you triage your priorities effectively, but you need to move fast and start now to prevent further damages.
As you save your business, please check out our blog section for more informative posts. You’ll discover valuable content about managing your finances, family, and relationships during this time.