In this immensely competitive world, a struggling business will most likely fail sooner than later. Your strong entrepreneurial spirit is compelling enough to start a business, but not enough to keep it afloat for long until you actually start making a profit.
Businesses fail for a plethora of reasons. 80% of small, new businesses fail because they don’t start with the right amount of capital. 76% fail because their business model is ineffective. 75% fail because they don’t determine the prices of their services effectively. 72% fail because they lack proper research of their target market. 69% of them fail because they don’t review or assess their performance, and fail to acknowledge their shortcomings. Over 60% of the businesses struggle because of a flailing economy as well.
These numbers are scary but fret not! Now that we have these distressing figures out of the way, we will guide you through a few steps to help revive your struggling business and change things for the better.
Through this article, you can find ways to take control of the situation and make the best out of it.
It’s not a surprise that numerous small businesses give up easily, and close shop too quickly, instead of toughing it out. ‘Growing Pains’ is a mandatory phase at the beginning of any business.
You sow a seed, and you water it every day, but it won’t be until days you see a sapling pop up. It’ll be longer than that until it becomes a massive fruit-laden tree. The same is the case with start-ups. Sometimes you won’t see a profit for a long time, but you must persist.
In many cases, however, the exact opposite should be done.
Sometimes it’s the quality of the soil or the amount of sunlight that seems to be the issue. If you don’t see any way to save your business, it’s better to let it go and start afresh. The quicker you act, the better your prospects for success.
Recognize the Problem
Try to understand what is it about the business that doesn’t seem to be working. Is it an internal issue like overspending or poor upper/middle management? Those issues can be resolved by carefully monitoring expenditure or a change in personnel, respectively.
Perhaps, it is an external issue, like the inability to compete with already established businesses or large corporations. Big corporations will always quote better prices for consumers that a smaller firm will simply not be able to match. In an instance such as this, always remember that smaller firms can provide better customer care services and work on making excellent customer care a priority.
In case the root cause seems to be a decline in business, reassessing your sales team and reevaluating your approach to advertising and marketing can be an effective method for growth.
Cut Down on Expenses
A struggling business must cut down on its finances by reducing expenditure and putting an end to unnecessary spending. The operating budget must be reviewed minutely to work out immediate strategies for cutting costs.
You can try to reduce expenses by implementing ‘work from home’ jobs for certain roles that do not require being present on-site. Energy-saving electrical equipment significantly brings down the electricity bill and will help in cutting down costs as well. Eliminate unnecessary roles if they exist, for instance, customer service roles can easily be outsourced from other countries at a lower cost. Letting working personnel go must be saved for a last-ditch effort though.
Apply for a Business Loan
In case your business isn’t making enough profits, but your business model seems effective and sustainable, you can apply for a business loan. The loan can be used for various strategies to help boost your profits.
Use the loan for branding, marketing, social media outreach, as well as discounts or other promotional offers. You can also use the loan for hiring more personnel if necessary, and even relocating to a new market better suited for your product.
Consult the Experts
Last but not the least, don’t be afraid to seek a second opinion. Take counsel from nonprofits like the U.S. Small Business Administration and Service Corps of Retired Executives (SCORE) for your struggling business. These organizations were created to provide assistance to entrepreneurs and provide a complete assessment of your business at little or no cost.