Published on September 8th, 2016 | by Kandace H0
Startup Doctor: 4 Fast Ways To Fix A Failing Business
There’s a reason why so many people are so eager to start and run their own business. Perhaps they are tempted by the difficulty of succeeding in such a competitive economy. Or maybe it’s always been their dream to own their own company. Every year, according to the US Census Bureau, 400,000 new businesses are started, but nearly 90% die out almost immediately—and that’s only in the United States of America. Below, you’ll find 4 fast ways to remedy a failing company before it’s too late—and keep the dream alive.
Determine Where the Leaks Are
What’s causing you to fail your business? Is it a high customer or employee turnover rate? Expensive materials and supplies or unreliable suppliers that’s leading to delays? Weak marketing approach that’s not tailored for your target audience? Know the weak spots in your game plan before going on an all-out purge that could lead to more harm than good for your business. It’s better to work smart and hard, instead of just hard. Have a plan of action. Saving a business usually takes a scalpel, not a hammer.
Use Parameters for Gauging Current Business Condition
Profit is perhaps the single most important measurement for success. Albeit, it is not the only indicator you should be using otherwise you obstruct yourself of a bigger picture view of your business. Look at customer and employee satisfaction ratings, customer base growth rate, innovative efforts, and leads acquisition. These are all parameters that indicate how your business is profiting or losing from the current efforts being made. According to the experts at Navicor Consulting, the number one reason businesses fail is that owners don’t know how to interpret the profit & loss report. Use profit/loss reports to look for areas where you are actually losing the most money per annum. But don’t just cut—build a plan toward sustainable profitability.
Trim the Fat
Once you know where your business stands and what reasons are serving as resistance against its growth, it’s time to eliminate the “fat”. Consolidate all your business expenses in one spreadsheet to get a visual inspection of where the money is being spent on. Determine what expenses your business can live without and get rid of it immediately. For instance, for a magazine company, you can save a lot of money by switching to a different paper thickness for your printouts.
It seems ruthless to just let go of people who are no longer assets to your business, but that’s why they call it business; nothing should be personal. Replace employees and managerial staff who have been slowing down company growth due to lackluster performance and inability to get on board with the company’s future direction. Not a soul in the world likes layoffs, and chances are it will be hard to let some people go. However, for the health of the business, sometimes it must be done.
Don’t just jump overboard in a failing ship. At times, your business just needs better oversight, managers need more accountability, and relatively slower remedies to keep it afloat. Stick to what you love doing and you’ll find a way to make money off it soon enough.