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How to Revive a Failing Small Business

Discussion in 'Growing Your Business' started by djbaxter, Feb 8, 2018.

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  1. djbaxter

    djbaxter Administrator Moderator Member

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    How to Revive a Failing Small Business
    By Robyn Howard, AllBusiness.com
    February 7, 2018

    Do you ever feel like you want to close the doors of your small business for good? Well, you are not alone, and giving up shouldn’t necessarily be your first option.

    Understandably, watching helplessly as your small business falls apart can be really frustrating and, out of desperation, many of us end up making unwise choices. To revive a failing small business, you’ll need to do more than the obvious tricks like rebranding.

    Innovate
    Markets, people, and technology all change. What’s relevant or trendy today isn’t guaranteed to stay the same. Your business, too, should change in order to adapt to the ever-changing world. Choosing to focus on today’s marketplace without anticipating the future is what made known companies such as Eastman Kodak, Motorola, Sony, and Yahoo lose their edge. Experts call it the strategic trap.

    Develop a new marketing plan
    Marketing is one of the few elements that can either make or break your small business. Did your previous marketing strategy deliver good results? If no, then it needs to be refreshed.

    Small business expert Melinda Emerson lists the essentials of a good marketing plan as follows:
    • Market research
    • Target market
    • Positioning
    • Competitive analysis
    • Market strategy
    • Budget
    • Metrics
    Each one of these items matter in turning around a failing company, but I think knowing your target audience is one of the biggest factors. Try to understand them by obtaining all the essential information that you can about them. You can speak to them directly through email or social platforms, and request them to share feedback on your services or products, plus any other suggestion(s) they may have.

    Look for a business partner
    It’s true that two heads are really better than one, and this can manifest itself if you can find a partner who will bring in fresh ideas or can invest capital in the business. A partnership can expand your network, business offering, and customer reach. When looking for a business partner, always narrow it down to people or businesses whose values, mission, and style complement yours.

    Take new risks
    Facebook founder Mark Zuckerberg was once quoted saying that the only strategy guaranteed to fail is failure to take risks. If you hope to experience solid growth in your small business, forget about waiting for success to happen on its own. What that means is you should not just confront but embrace risks and leverage them. It can be daunting at first, but then again, you will never access the good opportunities out there if you never try.

    Read more...
     
    NexlevelBiz and Edvin like this.
  2. Jrob

    Jrob Member

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    That is a great article, but many businesses that get into financial trouble is because they don't believe in marketing besides word of mouth, do business the same way no matter the results and not open to new ways to grow their business.

    Years ago, I use to do promotional sales for small-medium retailers as a way to raise some cash and get new customers. While I was training for this, we were told in the class some business owners would hope we would fail, because it made them feel better the experts could not help them. The people in the class and myself thought that was crazy and no way. We all encountered this at least once and myself 3-4 times.

    I have contacted other businesses with a free offer or $1 and were not interested, yet within 6 months were out of business. Sadly, many businesses are like that. They will say they need help, but don't take action.
     
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  3. NexlevelBiz

    NexlevelBiz MVP Member

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    Great article, love the approach. My take on the headline. "How to revive a failing business". Well that says a lot. "Revive could mean focus on growth". The failing part could mean stop the bleeding. I have significant experience with this topic from my client base and it really depends on what stage of failing the firm is in. But here is a quick summary of one approach. Growth and reviving the revenue is important for a failing business but before that, the "current economics are wrong for what the firm is trying to do".

    I believe you must do this fairly quickly because depending on where they as a failing business "time" is critical.

    1) Assess - do they really know what's wrong, is it revenue and within that is it marketing, sales pipeline, market position, pricing, or a litany of issues, or is it on the cost side things are just too expensive, product issues, customer service related, operational, even tax matters or could be revenue issues and cost issues.

    2) Once you have a list of the 2-3 issue on the revenue and similarly on the cost side. I recommend doing the following. Initially, focus on the cost side (what you are spending). The one thing between revenue and cost that you change immediately is what you are spending. Would you believe I have countless entrepreneurs thinking they can "grow" their way out of trouble, but frankly you can "cut cost" your way out of trouble or even stabilize the financial situation?

    3) Be aggressive -> reduce and cut none essential costs and even some essential things that don't affect product or service delivery.

    4) Once you start cutting non-essential and you go deep at cuts (including personnel) but for me, that is last resort and I have helped entrepreneurs cut out millions before even touching staff.

    5) At some point, if they can stabilize the financial condition as the firm has to get to profitability or projected profitability before they can embark on attacking the revenue issues. The reason is that attacking the revenue problem will generally cost incremental dollars which if the firm is failing may not have the disposable cash to invest in that faucet right now. Here's another thing what if the marketing investment doesn't work (it doesn't improve revenue), then the firm still has the high-cost structure and a failed marketing program on top of that.

    Failing firms in my opinion that are establish need to adjust the cost structure to the current revenue. Once that's done the amazing marketing pivot that Robyn Howard indicated are great ways to continue the turnaround. By having a lower cost structure the firm will get more time to see which marketing strategy it can change to move the needle on the sales end.

    To your continued success on the next level.
    Nexlevel Business
     
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  4. evolvingdigital

    evolvingdigital Member

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    Great answers. However, sometimes you may have to walk away from a failing business. Time is the most precious commodity, and spending years "flogging a dead horse" may not be the best thing for you or your employees. Especially, if you lost passion for the business, or were simply unlucky (e.g. regulatory changes).

    If you have to fail, fail fast and move on. The world is full of new opportunities.

    Aleks
     
    Last edited by a moderator: May 24, 2018
    djbaxter likes this.
  5. thefastlanehere

    thefastlanehere Member

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    I really like your approach. I'd love to add something here: I've seen many businesses fail because they are very bad at handling their online reputation and offering a top-notch customer support service. I firmly believe it is a department that requires an investment of its own, be it CRM social media integration which is hot nowadays, because many customers user Facebook and Twitter to receive support from businesses, adding a live chat which is an excellent channel for support AND closing sales, as well as panel that allows you to reply to emails ASAP.
     
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  6. mfawcett

    mfawcett Member

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    That's a good point, fastlane. I worked for a mid-sized corporation here in Canada, in Customer Service, and recently they setup social media. However, they handed it off to already over-worked CSRs; social media was clearly not a priority for them. It would have been better if they had one or two dedicated digital marketing staff who could handle social media.
     
    djbaxter likes this.

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