Small businesses are built with a lot of passion and commitment. However, many a time, they falter and deviate from the path envisioned by the entrepreneurs. It does not come as a surprise to many as most start-ups fail even before making it to the five-year milestone. The reasons behind the downfall can be varied and range from unskilled management to scarcity of funds and the inability to attract customers.
As an entrepreneur, you must be ready to face such challenges and prepare for any obstacles that might hit you off guard. If you intend to acquire a profitable business for sale in the United Kingdom, then you must train yourself to sail your way through the troubled waters. With a resilient attitude, you can turn the tide and stay afloat.
Here is the 2019 guide on saving a struggling small business and emerging triumphant after facing turbulent times.
1. Maintain A Calm Demeanour And Stay Positive
When you get the feeling that the ship has started sinking, you need to put your best behaviour on display. Contain your displeasure about the emerging problems to keep your team calm and composed. If the leader starts panicking, it can create an environment of anxiety and distress among the employees, which can make matters worse.
It can also lead to mass resignations which can further deteriorate the health of the organisation. Everyone stumbles upon a roadblock, but rather than giving up; you must strive to come out of the negativity and take the challenge head-on.
2. Determine The Weak Links And Threats
Now is the time to set your preconceived notions aside and think objectively about what exactly went wrong and how. Conduct a SWOT analysis of the organisation and figure out the root cause of the problem. Analyse the performance of the business and check where it is lacking, such as pricing, product offering, distribution channels, etc.
Compare the current status with the time when the business was performing well and generating a steady cash flow to assess the weak points. Once you have gathered ample information about the problem areas, you can start working on improving them.
3. Revise Your Business Strategy
Revamping the business model can be time-consuming and expensive. Thus you must focus on revitalising the operational strategies after consulting the board members and department heads. Devise new time-bound short-term plans with measurable goals that are comprehensively understood by all the employees and are in alignment with the long-term business objectives.
Motivate your staff and lead them with a renewed vigour to fight for survival in the competitive market. Make sure that you are making more money from sales than you are spending on the delivery of your products to maintain a positive contribution to the bottom-line.
4. Make Plans For Cash Flow Improvement
When the business is going through a rough patch, it is difficult to allocate funds as there is a visible shortage. Therefore, you need to revise your budgets and make careful amendments keeping in mind the cash reserves, incomings and outgoings. Make a cash flow plan for the next six months and know how much you need to spend and when.
You can also improve the financial health by refinancing, which will alter the loan agreement and get you a better rate. Besides this, you can invite venture capitalists and angel investors to invest in your business and make them stakeholders in return for their contribution. You can also look for crowdfunding options or get financial help from family and friends.
5. Cutting Avoidable Costs
You need to reduce the expenses when there is not enough to splurge on unnecessary things such as company luncheons and paid travels. You can request the landlord of your leased office to reduce the rent for a couple of months considering the situation and cut down on the amount spent on utilities with judicious use of the amenities.
If the situation is getting out of control and you need to take strict measures, then you can lay off some people to avoid the complete shutdown of the company. It can be a hard decision to make, but you can always rebuild a team once things get better.
6. Negotiate New Terms With The Creditors
Trying to hide away from the money lenders is not going to fetch you more time for repayment. Instead, it can ruin your credibility and relationship leading to more frustration and sometimes lawsuits. As a seasoned entrepreneur, you must honestly communicate about the current business conditions to your creditors. You long-standing rapport can help you in negotiating the terms of payment. As your trusted partners, they will understand the circumstances and might agree to offer their support.
7. Rework On The Marketing Plan
The most common reason for business failure is not making enough profits due to decline in sales. It implies that your target audience is not satisfied with your offering and has taken a liking for a competitive product. Thus to bring your customers back to where they belong, you need to understand what they want and offer them the same.
Learn from the mistakes that tanked your marketing strategy and stay away from them. Utilise all the touch points to communicate your revitalised proposition to your customers through social media channels, direct mails, fliers, newsletters, point of sales material etc. These promotional items are cost-effective and impactful.
8. Pull Your Organisation Together
Emulate the saying “when the going gets tough; the tough get going” and start pulling the strings of the loose ends. Make sure that no more time and money is getting wasted in any of the departments. Work on making the business processes more productive and result-driven. Organise and streamline the operations and do away with repetitive tasks.
Make customer satisfaction the primary goal of your organisation and get advice from industry veterans to smooth out the bottlenecks. Hold on to your best employees and allow them to put their ideas on the table to improve the business.
Business failure depends on a plethora of factors and can lead to the inevitable end of a promising entity. However, an entrepreneur with his grit, determination and the zeal to come out of the bad times with flying colours can turn the tables and lead the way back to success. If you are looking for business opportunities in the United Kingdom, but are sceptical about the risks involved, then you must adhere to this guide on saving a struggling business.