Follow these steps and see if your business is able to recover before closing your doors for good.
If your business is struggling, you’re not alone. The fact of the matter is, roughly one-third of businesses fail within the first 2 years. However, there are several things you can do to revive your business before calling it quits. Follow these steps and see if your business is able to recover before closing your doors for good.
1. Identify the Problem
Your business may be suffering for a variety of reasons. Perhaps a competitor or multiple competitors have entered the marketplace and taken your share of customers. Or, your business hasn’t kept up with changes in the market. It can be tough to take an objective look at your business, but it must be done. Start by identifying a time when profits were up and sales were strong. When did this change? Was it the appearance of a new competitor, failure to update your product or have your customers fallen on tough times? Determining the issue is half the battle. If you can narrow down the reasons as to why your business might be suffering, you can focus on how to address the issue head on.
2. Revitalize your Marketing Efforts
Putting your customers’ needs first is one way to ensure success. If you're giving your customers what they need, they won’t have to look elsewhere. If you’re not entirely sure what your customer wants, ask! Make sure you fully grasp what your customer expects and let them know why you’re the best choice for supplying it. Checking in with customers is a good practice for any business, struggling or successful. It’s a great way to get on the same page and remind customers that you’re working hard to maintain their business. There are several low cost ways to reach new and existing customers. Direct email is one of the least expensive ways to address your audience. Even purchasing a new list to tap into new markets is fairly inexpensive. You may also market yourself via social media (Facebook, Twitter, Instagram) at low to no cost. If industry appropriate, you can even work with discount sites like Groupon to offer your product or service with a geographically targeted offer.
3. Revive your Offerings
Remember when you reached out to your customers to determine what they needed? That information is incredibly valuable now as it allows you to alter your product or service to meet those needs. Sometimes your customers remain the same, but due to a shift in technology or something else, their needs change. Existing customer feedback will steer you in the right direction, but you can also poll your target audience to see if you can garner any additional suggestions. This can be accomplished via social media or an email campaign. Sometimes the problem isn’t necessarily with your product or service. In this case, you need to dig deeper. Seek the advice and counsel of professionals and other entrepreneurs within your industry.
4. Alter your Business Model
Changing up your business plan may sound impractical, but a detour in your current way of operating may be in order. Take telephone solicitors, for instance. There was a point in time when solicitors called homes to market products and services. Eventually the answering machine was invented and people began to screen calls from telemarketers. Caller ID and new government regulations further enhanced the obstacles phone solicitors faced. The final nail in the coffin was the widespread use of cellular phones, which resulted in the decreased amount of landlines. Instead of sticking with the old business model, modifications were necessary based on changes in the market. Successful call centers that once served telemarketers are now devoted to technical support, customer service and other functions.
5. Boost Funds
Generating more capital is an obvious choice when trying to save your business. However, there are alternative routes to just refinancing and working with the bank. Refinancing will allow you to change your loan agreement for a better rate and is a good solution for some. Debt payment is repaid across a timeframe that will allow increased cash flow. If you’re in it for the long haul, refinancing makes sense.
Beyond traditional financing, you may be interested in equity funding. This could be an option for you if you have a unique product or service and feel you can leverage capital via investors. Venture capitalists and angel investors provide investments in your business, in exchange for ownership stake. The investment amount will typically dictate the level of ownership and whether or not the investor is involved with managerial or other similar roles.
Another option if you’re 62 or older is a reverse mortgage. It’s a loan that allows you to collect the equity you have built in your home. There are no monthly payments, but you will be required to pay property taxes, insurance and utilities while freezing any future mortgage payments. Taking a relatively small amount of money and turning it into a long-term income stream may be exactly what your business needs. There are also newer, less traditional alternatives, such as crowdfunding and peer to peer loans.
6. Reduce Costs
Nobody wants to downsize a business, but it may be necessary if you’ve exhausted all other options. Attempt to decrease costs by closing locations, or even your entire business, temporarily. If labor costs are one of your primary expenses, you may be able to utilize contract, temporary or outsourced employees to replace higher-cost personnel.
Applying these strategies will improve your attempts at resurrecting your business. These tactics will help refocus your efforts and aid you in deciding to forge ahead or eventually close up shop.
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