Phil MeekinView Profile
If your business is going through a difficult period of trading due to the loss of customers, or a downturn in demand, it can be a challenge to know how to ensure its survival and help it avoid facing debt issues or insolvency.
Although it’s unlikely to be easy, there are several things you can do to get your business back on track. To help you achieve this, we have put together five tips to help turn your business around if it’s going through a challenging time.
Find out what went wrong
Figure out exactly where the issues lie and use your findings within your growth strategy. On many occasions, a downturn in business is not a result of actions within the company, and they often come about due to external pressures which are out of your control, but having this insight can help you prepare for similar situations in the future.
There are always valuable lessons to learn, which can give you something to aim towards avoiding in the future. Don’t just look at the failures, focus on what you did well and what you’d like to continue doing so you can create an all-round plan. This may help you better prepare for the future and give you an idea of where to focus your attention to help turn the business around.
Cut costs where you can
Cutting costs can be tough; it may be difficult to know where to take money from, but it ensures your business can afford to pay its liabilities despite a fall in sales or the loss of a client. Look at your budgets, balance sheets and statements to see areas of overspending. From here you should be able to determine what you can cut back on, it could be freezing bonuses, marketing, production expenditure. One of the big questions you should ask: ‘Are we maximising our businesses process.’ This in itself can cut costs across all aspects of a business.
Once your business stabilises, you may be able to bring some of these outgoings back, such as networking or certain staff costs. Cutting costs can be one of the most difficult parts of a business turnaround procedure, but it can be essential to help it continue trading in the long run.
Do your managers have enough control of their team? Are teams fulfilling their purpose? Are there too many staff in one department or not enough? When your company goes through a difficult period, it is always worth evaluating your team, making sure the people you have working there are best for your company and that they reach their full potential in their roles.
If people aren’t performing as well as they could be, it could be worth looking into training, moving them into another area of the company or even letting them go. You will need to ensure you have a committed team working towards the same goal of helping the company to grow and succeed.
Stick to what you know but look forward
Work out what is profitable for your business and stick to building and growing this area to reap the rewards of profits and a steady client base. For some businesses, stripping your business model back to basics can be the key to helping turn fortunes around and get back on track.
However, it is always worth looking towards the future of the business. For some, diversifying or moving into a new area can help turn your fortunes around. If the demand for your products or services has fallen, then it will be important to explore new areas to target, whether that’s creating new products, stocking different products or expanding your services.
Network, build up relationships, plan your new direction and put in place a good marketing campaign to help your business transition into what will hopefully be a very prosperous future.
It is likely to take time to turn your business around. You should be aware of this and how it could affect the business’ balance sheet for the next year or so, without expecting instant results. However, it is always worth celebrating any successes you have.
From winning a brand-new contract to securing a financing deal which can help your business expand, these celebrations are important in motivating you to keep working hard towards your end goal. It’s also important to celebrate staff’s successes, particularly those that have stuck with you through this time, so they know that they are appreciated for all the hard work they do and to keep team morale up.
Turning around a business is seldom an easy, pleasant task, and you may have to make some difficult decisions. After you decipher what went wrong in the first place, you might have to cut back your non-essential costs, and this may include restructuring your staff.
Once you’ve got the unpleasantries out of the way, you can start rebuilding. Stick to what you’re good at, but think about the future, and what’s likely to take the business forward. When you are successful, celebrate, even the small things as it will boost your staff morale and keep them driving forward.
If your business is still struggling despite rescue efforts, or you’re suffering from bad debts, get in touch with us as soon as possible. We can help you to deal with your debts and turn your business around or close it down, allowing you to start again.