Nobody ventures down the road of business ownership with dreams of failure. It’s hard to narrow down just how many existing businesses fail each year, but the numbers definitely work against all existing SMB or corporate business.
Though most will blame the economy for their financial woes, it’s rarely the case. If you’re running a small coffee shop in rural North America that sells premium cups of coffee for $8 a pop, a poor economy might be the reason your business is going under, but that’s really a poor business model to begin with, isn’t it?
Most businesses are failing because they aren’t in touch with their customers, changes to the industry, and their competition.
Nearly all businesses that are under the gun, with only a short time to live are there because of clueless business owners, period!
Failing Businesses Owners Clueless
According to Grant Cardone, motivational, sales, and business turnaround expert: “It’s rare to find a CEO of a once successful, yet now failing business who has the first clue as to why it’s failing.”
This should come as no surprise. Obviously, if they knew where and how the business started to head south, they’d surely be able to come up with a game plan to right the ship again and set sail into the land of profits.
5 Tricks for Developing a Successful Turnaround Mindset
Stubbornness and the inability to change is a major factor that failing business owners have to deal with. It is, in fact, a strong contributing factor (if not the main reason) that your in need of a turnaround to begin with.
Stubbornness in all its facets needs to go straight out the window. This may even include changing your bull-headed vision of what your company stands for and where you want it to head. Sometimes a complete reinvention will be needed to get the momentum moving forward again.
2. Don’t trust your gut implicitly
Just as you can’t be stubborn, you really can’t continue to trust your gut anymore. If your gut knew what was right and wrong for your business, you wouldn’t be in this mess. Realize that you might not be the next Soichiro Honda or Steve Jobs.
Each man had a persevering vision for where their business model was going. However, they were lucky to an extent. Both pushed forward with their ideas, while ignoring criticism from experts in their respective industries. Be willing to listen openly to what other people are telling you about the current state of your business and where it’s going.
Trust your gut only after weighing all potential advice and outcomes!
3. Be open to criticism
Any criticism can really hurt if you let it. On the other side of that coin is the promise that an objective critique of your business can actually help save your business. It’s hard to see the forest for the trees in a failing business because you’re too involved in the problem, unwilling to let anything else into your peripheral.
Seek out objective, unabashed, unemotional, critical opinions from people who don’t have a financial stake in the business’s success. Anyone who has something to lose if the business fails at this point is potentially blinded by the gloomy fog surrounding your failing enterprise.
Let other opinions in and weigh them carefully. If you’re unsure about one person’s critical opinion, take that opinion to another person and ask them what they think.
Don’t criticism out!
4. Turn back the clock
Once you’ve identified where you’re going wrong, hopefully by getting several opinions from outside, objective sources who don’t have a financial stake in your business, it’s time to get back to basics.
Take yourself back in time to when you were starting the business for the first few months or years. You didn’t order lunches in for the entire staff every day, you thought before you proceeded with new ideas, asked for help from people who knew better than you did.
In addition, if you’ve expanded the company into uncharted territory which has contributed to its current state, it might be time to step away from those unhealthy areas. Don’t be afraid to outsource expensive in-house staff, close offices or stores that just aren’t cutting it, and discontinue services that aren’t putting out a profit – no matter what your original business plan was!
5. Focus on new customer acquisition
Last but not least, you need new customers!
Obviously, the existing clientèle aren’t cutting it. Changing your mindset and the structure of the business won’t save you if there’s no money coming in. So many businesses fail because of the owner’s willingness to sit on their laurels – the “I have lots of great customers” mentality. If you really had “lots” of customers, you wouldn’t be in this position!
There are plenty of paid advertising avenues to follow, along with non-paid methods such as networking at local and industry events, forming mutually beneficial partnerships with other businesses, becoming more active on social media and industry-related Internet forums, and much more.
Check out this entrepreneur.com article for a simple four-step guide for acquiring new customers.