How to Save a Failing Business
It can be hard to find funding when your business is struggling to stay afloat, but these ideas may help you make it through rough waters.
In business, you don’t need a compass to know north from south. When you start wishing you were colorblind so your bottom line didn’t look so red, then you know something is wrong.
Here are some ideas to get you started. Keep in mind that most successful business owners have failed in previous ventures. It might be time for you to cut loose and start over with something else. But if you think your company is salvageable, these ideas may help.
Reassess Your Business Model
When Andrew Carnegie addressed the students of Curry Commercial College, he told them, “’Don’t put all your eggs in one basket’ is all wrong. I tell you ‘put all your eggs in one basket, and then watch that basket.’”
He further explained that the “one fault of the American business man is lack of concentration.”
Are you trying to do too much? Maybe it’s time to reassess your business model and move your resources into a single area where you know you can excel.
Look for untapped markets that your skills would make sense for, and then adapt to that niche.
William Wrigley, Jr. found his fortune after not one but two pivots. His first idea was to sell soap. He would give buyers a free can of baking powder with each bar of soap. But when he noticed that people were buying the soap to get the baking powder, he started selling baking powder instead. With every baking powder purchase, he threw in some free gum, and then eventually shifted again to turn his business into a gum company. This is where he excelled.
Don’t Stop Marketing
You might be tempted to cut your marketing budget to save cash. This is a mistake. When you turn your back on advertising, you’re pretty much giving up on your business. You’re saying that you can’t afford to bring in new clients, which spells disaster for the future of your company.
Fight for Your Company
In business, there’s no such thing as friendly competition. Take whatever piece of the market you can, and don’t leave anything behind.
Be sure to gauge your employees’ response to these efforts. They will undoubtedly know something is up, and workplace anxiety might reach unprecedented levels if they think the business is going under. Your office could become a very stressful place to work. Do your best to keep the troops calm, yet focused.
Take a Step Back
Did you create your company? Such an arrangement can cause tunnel vision. You might focus too much on what you do best and not enough on business in general.
There are plenty of entrepreneurs out there who enjoy success by chasing one thing they’re good at. But that kind of success can only last for so long before you must adopt other business principles. If you can’t handle these on your own, you might need to get help from someone who can.
Cut Expenses
Waste is everywhere. Fortune 500 companies throw away fortunes on bad decisions. But they stay Fortune 500 companies by fixing their mistakes by getting rid of unnecessary expenses as quickly as possible. Here are some ideas on how you can cut costs for your company:
- Put all the automated payments you make onto a spreadsheet and decide if they are still necessary
- Negotiate your lease with your property management company
- Switch credit card processing services
- Knock a zero off the end of your paycheck and invest it back into the company
- Reduce business travel
- Scale back the hours your employees work
Look for the fat. Trim it.
Send Invoices to Your Debtors
Some of your clients won’t pay you unless you push them. Send official invoices to everyone who owes you money. Include a personalized letter and follow up with a phone call. Be polite if you want them to remain your clients, but don’t be afraid to get serious. If they don't pay you, then you shouldn’t want them as clients anyway.
Sell Your Business
There are times when it makes more sense to recoup what you can by selling your business. This will give you the means try something new.
Don’t look at it as a failure. It’s your chance to begin again.
Final Thoughts
When you “right the ship,” you take a vessel that’s tipping and correct it. As the captain of your company, it’s your job to fix what’s wrong. It’s our hope that you’re able to return to port with your ship intact, better prepared to chart your next adventure.
