“Is it possible to save my business?” That was the question Jane sent me a few weeks back. She’s the proud owner of a small catering business. The business had done well for more than 10 years, but now it’s in real trouble. She didn’t want to know how to make a business successful. She needed to know how to survive.
Sales are down. Costs are going up. Competition is fierce, and she just lost the baker who’s been with her since the start. Facing those difficulties, it’s no wonder Jane is full of anxiety. It’s overwhelming. Where should Jane start?
My experience tells me there are 5 critical steps to take when your small business is in peril:
1. List all the problems and the subsets of each problem area.
Let’s say you are not as profitable as you used to be. One reason for that is your revenue has declined. Let’s consider all the reasons for declining revenue:
a. Are sales low?
b. Are customers buying lower cost alternatives?
c. Have buying patterns shifted? Are they buying on the internet or from a competitor? What is the reason for that shift? Are customers simply not interested in what you’re selling? Or are they interested but are they buying from your competitor? If so, why? Does the competition have better service or lower prices?
In short, really dissect the story behind the story. You can’t do much about “sales are low.” But you certainly can do a lot when you find out what your customers want. (Read “What is My Business Worth?”)
Let me give you a personal example. My daughter needs to get some remodeling work done in her apartment (she lives overseas). It’s taken months and we still haven’t found a contractor. Why? Because most don’t show up even to give quotes, and the ones who do are only willing to do part of the job.
Well if we go this route, we’ll have to become master contractors and coordinate the various companies and we’re not willing to do that. We’re going to continue our search until we find a company that will do the entire job. That may sound very reasonable to you and me, but some of the companies we’ve contacted act as though we’re being ridiculous.
This is an extreme example, but I think it illustrates the point. Rather than complain about not making a sale, some entrepreneur should use this as an opportunity to exploit the market. If a contractor did so, she’d offer the complete job and the market would be hers.
So you need to be very clear on what the problem is. Are your costs too high? Are your sales too low? Do you lack systems? Are you missing the right people? Is your marketing ineffective? Are you unable to hold on to clients?
Make a complete list of all the problems you see and/or opportunities you haven’t taken advantage of. Don’t do any editing.
2. Don’t trust yourself.
The second step is to get some input from a trusted and respected business person. Ask what they think about your conclusions. What have you overlooked? What items shouldn’t be listed as problems at all? What does this person think are the most pressing issues/opportunities right now?
I recently asked a group of my women clients to get together for lunch to brainstorm ideas on how to provide a financial training program for other women. Remember, I’ve been in this business for over 25 years. I have professional training and experience. I’ve just about seen it all. The women who met with me were smart. Some were professional and others were stay-at-home ladies. But none were financial experts. You’d expect that they wouldn’t be able to come up with any new ideas…right?
They came up with ideas that never occurred to me. In all honesty, even though I spent a good amount of time thinking about this, their ideas were far more powerful.
Don’t overestimate your genius brain-thinking power. Seek outside friends. You can get great business consultant services for free. Just ask. You should meet with your “business consultants” a few times over a few weeks. You should hammer out an exhaustive list of issues and prioritize the issues. Finally, brainstorm solutions to the top three problems on your list and hammer out a schedule to report back on progress.
3. Put on the blinders.
Your list may be very long, meaning you have a lot of work to do. If you’re like me, I sometimes freeze up when my “to do” list is too long. That’s why you have to pick one thing. Break it down into daily action steps and set aside one hour each day to work it. During that hour, don’t answer the phone or e-mail. Focus 100% of all your brainpower and concentration on that one item before you and take action.
Move the ball forward. Sometimes you’ll advance 10 yards. Other times you won’t gain more than a few inches. But by spending one hour of focused time on this one issue, you’ll get closer to resolving it.
4. You might get burned a little.
When you are trying to save your business, you’ve under pressure. You will be under financial and emotional pressure. It will be difficult to stay focused. You’ll feel compelled to drop what you’re doing and put out the fire of the day. The reality is, if you don’t stick to the plan above, you’re going to be putting out fires for the rest of your time in business. You won’t have fun and you won’t make much money and it’s not healthy for you or your family.
That means, you’re going to have to let some fires burn. There will be damage. There is nothing you can do about that. You’re only human and there are only 24 hours in a day. You have to accept the fact that it will take time to save your business. This is the hardest thing for me to do but it’s something I’ve had to get used to.
5. Accept reality.
I hate to tell you this, but it’s possible that your business is beyond saving. It could be that there is no market for your business anymore or you can’t get business debt relief. You have to know when to close your small business and move on. There is absolutely no sense in kicking a dead horse, and there are plenty of other great small business ideas to work on.
This will not be easy to do. It will hurt but it doesn’t have to devastate you. I read histories of successful business people. Every single story I recall reading tells the story of a business person who failed several times before succeeding in small business.
Your business is not you. Your best chance of success is remaining detached and unemotional. If you wouldn’t buy your business today, chances are you shouldn’t own it today either. If this describes you, it’s time to sell your business or close it down.