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How to Make the Most of Your Dying Business without Closing It
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You thought about your business days and night, 24/7. It’s good when your business prosper - It’s hell if your business is ailing.
You did whatever you can as an owner to save your business: You did a huge marketing campaign to push your business up, you downsized some of your worst performing employees. You worked hard to reduce overheads. You tried to find other income venues - to keep your business’ ends meet.
But still, your business were dying - sales declined, profit dropped, customer just didn’t want to come.
Worse, your local area development committee decided to make the two-way road in front of your business location into one-way road only. Bad, bad for your business.
Even more worse, this year recession hits all aspect of human life - that’s including a business.
Eventually, you have to face it - your business fails. Or, to make you feel worse, you fail as an owner.
No, no - don’t tie a big rock on neck and throw it down the river - running away from failures are so not entrepreneur :) And not a gentleman or a lady is suppose to act.
Come on, now. Get your head straight up and cool down - there are ways to make the most of your dying business without closing it.
Sell it with dignity
Don’t close your business down - that’s not good for you, your ego, and the community where your business resides. Selling it is a better idea. Chances are, your business will prosper under a new management team and owner.
This doesn’t mean you are a bad, bad owner.
Businesses are complex - they can run well under a certain management style, and a failure under other management style. And to complicate things, businesses in a similar niche with the same performance can perform differently when managed under a certain type of owner.
Run your business like usual, full force. Find potential buyers and state your problems wisely, as well as the opportunity your business still have.
If you decided to use a business brokerage service, I have one word of advice - Don’t rely too much to a business broker, because no one knows your business better than you.
Relocate it
Relocation is expensive, but sometimes a good solution.
The problem with this relocation thing is, that when your business dying, you - the owner - is usually experience a financial strain. Unless you borrow from relatives or financial institutions, often you can’t afford the relocation.
Moreover, no one can guarantee that by relocating to other location, you are guaranteed a success.
Although I seem against the idea of relocation, it has certain perks - relocation tells your customers that you are having other options to serve them better. And, your business name is well preserved :)
Break your business into pieces, and spread the pieces around on better location
I view this as a better solution than a conventional relocation I mentioned before.
Your business is usually run two or more type of products or services. Businesses that adopt multi-product approach usually have one problems - you are so diverse, that visitors think your business is a general store. And being general, today, is not good.
For example, you own an ailing business service center offering internet access, printing, package delivery, stationeries and other business supports. You can salvage the most of it by doing this - open an internet cafe in one location and open an office supply store in other location.
Even if you are only selling one product, you are actually have more than one type of business.
For example, you sell donuts. Business is not good, so you decide to break your business in two parts and two different locations - a donut sales and production part, and a marketing part (free donuts, flyers, business cards, and so on).
Doing this, your business can be saved and even prosper better.
Close your on site operation, and outsource all activities to others
I never done this, but it seems a sound idea :)
For example, you have a printing company. If your business has problems, it’s usually because your overhead is killing you, while your revenue is on downward trend.
The solution I propose: Reduce your business’ overweight and cumbersome loads (too many departments, too many inter-personal problems, etc.) and outsource your printing order to other.
While this will result in a much smaller profit margin, but your overhead is significantly lower. And, while doing so, your business still have its name on the local community. Wonderful, isn’t it?
The downside, is that your business loss most of its tangible asset. But the trade off is, you get more intangible asset - which, to me, is much, much better than the tangible ones.
How to know what is the best solution for your business
Your best bet is to ask someone that has been in your shoes before - and succeed.
One, final, advice - Don’t ask someone that experienced business failure before but never recovered from it. He/she usually has a negative attitude about entrepreneurship and will talk you out to close your business and get a job. And, believe me, you’ll end up being one of the bitter people club. Seriously, you don’t want that to happen in your life!
Ivan Widjaya
Recession survivor
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How to Know when to Quit
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A business must have an exit strategy. If things becoming too hot too handle, escape from it or face the consequences.
Well, there are so many tough and aggressive entrepreneurs out there. So tough, that many of them refuse to ‘give up’ when faced with adversities - disastrous cash flow, lackluster management, drowsy business, or backstabbing partner - even if they were destroying entrepreneurs’ life, let alone facing bankruptcy.
Of course, giving up is not good. But know when to stop worth more than gold.
There is a world of difference between giving up and having an exit strategy.
Giving up is when you react to problems negatively without even trying. Exiting is when you react to problems positively with proper evaluation and after trying anything an entrepreneur can.
So, for a quitter, just like me, here’s some tips on how to know when to quit - elegantly.
Plan to quit even before you start your business
One major, huge, mistake by entrepreneurs is to think that starting your business right will guarantee you success. Not always. In fact, only 1 in 5 startups survive beyond the first year of operation.
The essence of entrepreneurship is to succeed more than failing - failing 5 times is not a big deal if you succeed in 6 opportunities.
So, again, plan an exit strategy before you even start your business - this will actually save you from hard times later on and provides you with some kind of safety net to fall upon when anything goes wrong
Quit when your business is declining or being stagnant
It is apparent to quit as soon as possible if your business is declining, but even if your business is being stagnant for two or three years, then you should quit immediately. Businesses are meant to grow. Why? simple. Inflation devalue your asset, not mentioning a recession period will do to your business. Also, don’t forget about the rising price of supplies and workforce salaries. That’s why your business have to grow to cover the operating costs.
Quit when you lose interest in what you are doing
No passion, no business. Period. No matter how hard you work, if you lost interest in what you are doing, your business will ail. It’s time to let it go - sell it to someone passionate enough, and move on. Find a venture that will interest you at least up until the next 5 years or so.
Last advice - From my personal experience, you ought to quit if your family start nagging you about the family cash flow situation. Personal finances are the best indicator whether your venture well worth it or not. Sell your current business, and start a new one.
Ivan Widjaya
A dedicated quitter
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