The C Suite
There are a variety of reasons why a business is struggling or failing, but that doesn’t always mean that the issues aren’t fixable. When your company is in trouble, it can be extremely difficult to firstly, admit there is a problem, and then take the actions to remedy it.
No single step is going to be a quick fix, you must be prepared to be in it for the long haul. Patience is extremely important. Also, there is no ‘one size fits all’ solution, so it’s important to know what works for your business and what doesn’t.
The road back to profit can be a treacherous one, but I’ve found that the below tips can help guide you through it.
Change strategy & be brutal
When your business is struggling, the first thing to do is to stop and revise your strategy quickly. Understanding specifically what’s going wrong and why it’s affecting your business negatively is vital. The sooner you isolate these issues, the better. Sticking your head in the sand will only make the business sink faster.
Be brutal with your existing strategy and try to think as an outsider. Work out the areas where you can trim the fat and the quick fixes. Of course, it’s never easy seeing your business struggle and not taking the shape you envisioned, but if you take a tough approach without emotion, you’ll quickly see how to rectify it.
Fresh blood can breathe life into a struggling business. Bringing in a fresh perspective can do wonders for understanding why your businesses isn’t succeeding and open your eyes to a wide variety of strategies to revolutionise failing areas.
There are various people you can bring into the company to gain a fresh perspective, like an external consultant. On the other hand, it may be necessary to completely overhaul the internal structure. Don’t be afraid of change and definitely don’t be too proud to step aside or take a back seat. This is a time when you need a great leader that will take the company in a new direction and have a new understanding of the market and the position you want to take.
It’s very easy to dwell on failure but during a business turnaround, success is one of the most important aspects to focus on. Ensuring that morale remains at a good level will mean that everyone remains motivated to work as a team to get through to the other side.
Make sure you discuss what is doing well and then focus on what else could be done to continue the levels of success. A little praise goes a long way.
Handle of cash flow & brutal cost cutting
Getting a handle of your costs, outgoings and your breakeven is essential. Cashflow kills a lot of turnaround business, so you need to understand your burn rate. Cutting costs and getting in control of your finances will make the steps to recovery a clear one.
If something doesn’t add real value to your business and its new focus, ditch it immediately. Extra luxury expenses like fresh fruit and a mid-week pastry run are great for company perks but in reality, it’ll be easy to live without them. Once you have restructured and got back on the straight and narrow, the perks can return, and they will be thoroughly deserved!
Bolt onto other businesses
Many businesses fail because they refuse to take advantage of the insight that other companies can provide. When your business is struggling, it’s always good to consider what other companies, both in the same industry and outside of your industry, can add or consider joining forces with someone else to take advantage of working with a bigger team. A partnership could be just what’s required; 50% of something is always better than 100% of nothing.
A strong ecosystem in business creates a buffer that increases your security. Expanding into a different sector could do wonders for your business and generate the new lease of life it needs. It can also widen the appeal of your business, allowing you to scale at an unprecedented rate. It’s important to not view a partnership as a weakness, but instead a new direction that makes your business stronger.
It’s always going to be an immense task turning around a struggling business and there is no one-stop solution. However, if you keep focused on your core business, understand what went wrong, create a short and long-term strategy and ensure that communication within the company is always open; you will be on the road to recovery.