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Business failure is indeed a reality. Many entrepreneurs have failed in the past, and the sad truth is many more will fall short in the future. If you’re reading this article, chances are you’re either about to give up on your company or you’re desperately seeking strategies to help revive your dream. Whichever the case, I have some good news. First, though, reconsider why you’re considering packing up your business.
When we’re faced with the very real possibility of failure, it’s tempting to give up. But it’s those days of near-failure that will test the strength of your business strategy. Giving up is easy. Toughing it out is the real challenge. Borrow a page from collegiate football coach Nick Saban, who sums up his philosophy in “How Good Do You Want to Be?” He writes, “Do not relax when you are far ahead or dominating your marketplace. That is the time to push even harder.”
Before you give up on your business, you owe it to yourself (and any employees) to devote some concentration to these six concepts.
1. 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.
2. 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 on 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.
3. 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.
4. 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 remains 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.
5. 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 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 select 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.
6. 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.
David Webb, owner of Hudson and Marshall auctions, gave this analysis of his company’s clients: “A large percentage of our customers buy buildings from failing businesses who just don’t have it in them to carry on.” If you can reach agreeable terms, it’s often best to enter a rental or leasing arrangement. If you absolutely must sell, endeavor to retain some proprietary rights in the property.