October 18, 2016
It isn’t easy to start a business. Exact failure rates are hard to find: Many popular sources, including Forbes, claim nine of 10 new businesses won’t survive for too long, while the Washington Post argues the true number is closer to five of 10 ending before their fifth anniversaries. Nevertheless, all entrepreneurs must be well-aware that their fledgling businesses are bound to flag sometime in their infancy, but only the successful entrepreneurs know how to make changes that will keep their businesses up and running.
To that end, here are six strategies to help entrepreneurs stay in business even after seeing the first signs of failure.
1. Reassess the Situation
Entrepreneurs are eager folks, and at the first sign of trouble, many assume it’s the beginning of the end. However, not every obstacle is a symptom of a dying business, so before making any rash changes, business leaders should make assessments to determine what is going wrong and whether it is fixable. An assessment also allows leaders to locate the weakest structures within the business and make repairs before true failure begins. To make a full assessment, business leaders should inspect the entirety of their business to determine all the areas that improvement needs to be made — even areas that appear strong could potentially be tweaked for the better.
2. Review the Strategy
While assessing the strategy, it is important for leaders to ask themselves this question: “Does my business have direction?” If the answer is anything but a confident “Yes!” then the business strategy might be an imminent cause of business failure.
After a certain period of growth, most businesses require a redefinition of their strategies. Likely, business leaders have achieved their startup goals and, without direction, the business has started to flag. Because the strategy is the foundation of a business, it is vital that leaders examine and fix the strategy quite often. Leading questions such as “Why does this business exist?” and “How do we intend to succeed in this business?” can help leaders be more accurate in crafting their strategies.
3. Re-evaluate the Spending
A lack of money is both the most common and the most obvious indicator of impending business failure. Businesses cannot survive without a healthy cash flow, business leaders who find their coffers empty must work hard to reinject funds into their venture or suffer the agony of defeat.
Obtaining external funding seems fast and easy, but interest rates and additional partners can weigh on a business in the long run. Instead, leaders should attempt to find more cash within the business before shopping for business loans or investors. Fortunately, there are several ways to add money from within, including reducing operational costs, using a factoring company to resolve unpaid or delinquent invoices, or selling fixed assets and drawing on personal finances (within reason).
4. Re-examine the People
It is easy to imagine a business as a living, breathing entity but, in fact, it is composed of a teeming population: Employees. If any one of those employees betrays the integrity of the business ― by slacking off, by snapping back, or by skiving away ― it shouldn’t be a surprise when the business starts to crumble. Leaders must carefully monitor their staff members and remove any bad eggs before the office starts to stink.
Additionally, it is wise for business leaders to examine their customer base. Dissatisfied customers talk, and eventually an entire audience its back on a business. Customer service is vital to build a thriving business, and leaders who neglect their customers will suffer for it.
5. Reconsider the Product
Though it can be the most difficult business aspect to change, selling a useless or unwanted product will never revive a dying business. To create profits, business leaders must know their products are innovative, unique and, most importantly, demanded ― or they must know how to make them so using clever marketing tactics. In oversaturated markets (or in underperforming businesses) it might be beneficial to pivot the business and begin offering different products.
6. Reassess the Process
Running a successful business is hard work, which is why so many people choose not to do it. Even though most entrepreneurs tend to have more daring and determination than the majority of the population, being a business owner or leader does not inherently set a business up for success. Leaders must carefully observe the business’ systems, ensuring every step runs smoothly and efficiently. If they don’t, the business will certainly fail.
Cher Zavala is a content co-ordinator who assists in contributing quality articles on various topics. In her free time she also enjoys hiking, traveling and getting to know the world around her. Cher has built up many strong relationships over the years within the blogging community and loves sharing her useful tips with others.