She went on to tell me how this year has been tough, and now she is struggling to stay afloat.
She had vendors calling because she was late with payments, she had lost some staff and she was trying to keep stock on the shelves. She was worried because her business was in a downward spiral.
She didn’t know if she could turn it around, and she was reaching out to me for help. She was at the end of her rope and the tears were flowing.
It takes courage to ask for help. More often than not, business owners can’t bring themselves to make a phone call to find someone who can give them advice on their business or share their struggles in a way that leaves them open to suggestions. I can tell you from experience that when our businesses are failing, we feel a sense of shame.
Quite a few years ago, I had a startup company in which I had sold shares. Not only was my money and time on the line, but the investors’ money as well. I worked hard to build the business but, like many entrepreneurs, I was trying to do too much. Faced with business challenges, I spread myself too thin and was stressed out and run down.
It almost wrecked me. When I eventually sold the business to pay my investors back, I collapsed exhausted on the couch for two weeks.
I was one of the lucky ones.
Businesses can fail for a number of reasons, primarily:
- a poor business model that fails to give value to customers;
- lack of profitability, which can be directly related to high expenses or low margins;
- low sales as a result of poor marketing;
- dysfunctional leadership, which results in the inability of the team to sustain focus;
- inadequate cash reserves to see you through growth spurts and slow times.
So what do we do if our business is failing?
Get a bird’s eye view
We often get so caught in the weeds of the business that we don’t take the time to see what’s really going on. Taking an afternoon or a whole day to examine the root causes of our problem can give greater clarity to the challenges we face and some of the possible solutions.
Understand your financials
Many business owners look at the bank account as a gauge of how their business is doing. But, in reality, they need to understand their financial reports.
Knowing what the numbers mean and how to make a difference are two different things, but both are crucial for small business owners. You might know what your margin is, but understanding what you can do to improve it is a totally different consideration.
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So how much is a business worth?
Understanding if your margins and expenses are in line with others in your industry can enable you to make some small changes that can result in big differences to the bottom line.
Know your customers
Understanding who your customers are and what’s valuable to them is crucial in revitalizing failing businesses. If we’re clear on how to add value for our customers and how we can retain their patronage, we can adjust our methods to encourage them to participate in more frequent transactions with us.
Marketing is changing: unfortunately, many businesses just repeat strategies that worked for them in the past. The key to effective marketing is being able to capture the attention of your ideal clients, giving them a reason to believe in you and calling them to action.
Having the right medium is also key. If we understand the behaviour of our ideal customers, we can reach them successfully. This can drive our sales and put money into our bank accounts.
Ask for help
Reaching out for business advice when we’re in trouble can be hard on the ego. But if we do it soon enough, it can be so much easier on our bank account.
Everything involved in closing a business is costly, stressful and depressing. If we turn our business around but still want out, we can save face and money.
Getting the right guidance from a business coach or other professional can save money and reduce your stress levels.
You might be discouraged or even feel like crying when you reflect on your business.
However, if you can take the time to change your approach and reach out for help, not only will you be more likely to succeed, but you’ll minimize your stress levels.
As a wise woman once told me, your pain today will be your strength tomorrow. Don’t give up!
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