Failure is an ugly word, but unfortunately, it is a word that is becoming common parlance amongst small businesses.
Thanks to the might of Amazon and eBay, and the competitive marketplace where businesses large and small are looking for a piece of the proverbial financial pie, some businesses are struggling to stay afloat. They lose their customers to the competition. Profits are lost, and losses are made. And the ‘closed’ sign hanging over the door looks set to be stuck there in a permanent position.
Still, we must never give up. If your business is struggling, don’t assume it’s over for you yet. There are things you can do before you are forced to shut up shop for good, and they are outlined below.
Identify the reason why your business is struggling
A number of factors can come into play here. Your competitors may be stealing your customers. There may be changes in customer demand. The economy may have changed, so your customers may not have the spending power they used to. If you can determine the issue, you may then be able to make changes. For example, you might have the opportunity to combat your competitors with special pricing deals. You might need to update your business model to stay within buyer trends. And you might want to reduce the cost of your product or service to better fit the pockets of your customers. By taking steps early to make changes, you might be able to claw back a piece of the marketplace.
Put more effort into your marketing
Marketing is key at any stage in business, but especially when sales are low, an extended effort needs to be made. Admittedly, this is difficult when you are already running at a loss, but there are free or low-cost ways to market your business that shouldn’t cause too much of a dent to your finances. For example, you might send out emails to your current customers, with news of special offers. You can do the same thing with social media. And you can advertise your business for free on websites such as Yelp, Google Places, and Superpages. There are more ideas in the linked article, so have a look, and implement them into your marketing strategy.
Speak to your customers
Why aren’t your customers buying from you anymore? The answer may be simple – there may be cheaper deals elsewhere – or it might be more complicated. You will never know unless you ask, so get in touch with them on social media, on the phone, or through feedback surveys. Get in touch with past and current customers, find out what you could be doing to improve their loyalty to you, and if you are given some useful suggestions, take the appropriate action to improve those areas of your business that need to be changed.
Find ways to boost your funds
When losses are being made, you will probably need a cash injection to keep you afloat. One option is a bank loan, but you need to be careful with this, as you don’t want another weight hanging around your neck if you already have debts to pay off. A better idea is to refinance an existing loan, and to do so at a better rate, as this is one way to manage your existing debt and improve your cash flow. Alternatively, if you feel you have scope for growth despite the difficulties you are under, you might seek the financial help of a venture capitalist or an angel investor to put funds in your business in return for a stake in your business. You might also consider selling new products or delivering new services to extend the scope of your business.
When you’re losing money, the last thing you want to do is spend what you don’t have. Look for ways to cut costs across your business, such as changing to a cheaper supplier for your office supplies, moving to cheaper business premises, and using any of the ideas in the linked article. After reducing costs in every possible way, you might then have the means to keep going, provided you take the other points in this article into account.
Don’t struggle alone. Seek help, and you might just find a way to save your business. An accountant will give you ideas as to where savings can be made. Your staff may have ideas on how to market your business or on how to cut costs. Friends or family may be able to give you an interest-free loan. Other business owners may be able to offer you experienced advice. And licensed insolvency practitioners such as the folks at antonybatty.com, are there not only to help you manage the close down of your business in the worst-case scenario but to help you turn things around should that be possible for you. Don’t be too proud to ask for help; losing face is better than losing your business.
It’s not over until it’s over, so fight back when your business is struggling. Use the suggestions we have presented to you in this article. And then continue to make changes when necessary to ensure your business has a greater chance of staying afloat in the long-term.
We wish you success, no matter how well your business is doing today.