Expert content creator, Uday Tank explores the six things small businesses can do to avoid failure during these testing times.
There’s hardly any business that closes up overnight. Prior to closure, the business owner would have been seeing the signs. But how he reacts to it will determine whether or not his business sees the light of the next day.
So the moment when your business is struggling is not the time to throw in the towel and give up, but the time to address the issue from its very core because failure to do so will cause your business to go under eventually.
That said, here are some steps you can follow to prevent the rivers of challenges from swallowing up your business, once it has become clear that it is sinking.
1. Identify the problem
If your business has been doing so well before now, but all of a sudden, it starts giving you the wrong signals, there can be no doubt that something has gone wrong somewhere. But what are the things that have gone wrong? Can you identify them?
Your business may be suffering for a variety of reasons.
Perhaps a competitor or multiple competitors have entered the market and are now offering something a little bit more than your offerings. Or maybe there’s been an alternative solution to the pain points of your consumers, and they’re now switching to this new solution.
Instead of wallowing in your thoughts, brooding at night, and going to the church to pray for transformation, you should sit yourself down and try to identify what the roots of the problem are. Trust me; there is always one because there is no light without a fire.
If you were doing so fine before and suddenly everything seems to be going south. There can only be one answer: something is wrong.
To figure this out, start by identifying a time when sales were healthy, and profits were rolling in. When did this change? Was the timing the same as when a new competitor entered the market? Or perhaps it happened when you decided to review the quality of your offerings or your pricing. If you can narrow down the reasons why your business is sinking, then you’ve almost won the battle to keep your business from closing up.
2. Revitalise your marketing strategies
Customers are the heartbeats of any business. That your business is currently sinking is because they’ve decided to switch allegiance. If they were still patronizing you in their numbers, you wouldn’t even think about closing up your business. Because even if the profits aren’t going up, the sales would still be what it used to be or even better.
So in order to win them back to your side, you may need to go back to the drawing board. And by that, I mean your marketing strategies. In case you’ve lost touch with what they really want, ask them. You can conduct an online survey to discover this, a quick contest with rewards, or put a call through to them if you can.
Once you’ve identified what their present needs are, you will need to revitalise your marketing efforts to announce to them that your business is now able to meet these needs. Not only will this bring back old clients, but it will also capture new ones too. And as part of your revitalized marketing efforts, you can offer existing customers some referral bonuses for every new customer they bring to you.
3. Revive your offerings
Now that you’ve identified why your business is sinking and how to reach out to existing and new customers, your next task is to find a way to revive your offerings. You don’t want your customers to come back and find that your offerings are still what they used to be. Something needs to change.
To begin with, you can conduct a quick market survey to find out what your present-day competitors are doing to win customers to their side. Perhaps it’s a new technology, cheaper offers, free delivery services, after-sales offers, and other enticing deals.
Once you’ve figured this out, think of a way to incorporate some of them into your business but not in the same manner as your competitors.
Remember, you want to stand out this time and not lose customers up to the point you start contemplating closure like before. So you need to add a little bit of edge to yours. For instance, if they’ve been offering customers a 1-year warranty when you weren’t even offering any warranty on your products or services. Now that you’re back, take it up a notch and offer a 2-year warranty, if you’re sure your products can stand the test of time. Furthermore, your new offers can include discounts, coupon codes, gift cards, and so much more.
4. Change your business model
There can be no debating whether or not you need to alter your business model at this point in time because you really do need to. Just take a look at most brick and mortar stores. Prior to the introduction and market takeover of eCommerce business, most brick and mortar store owners never offered consumers anything close to a home delivery service, let alone free deliveries. But upon the entrance of several eCommerce stores and their free deliveries, many brick and mortar store owners have had to adjust their models too.
Instead of sticking with the old business model, you should look to modify some of the existing models that are on the ground, based on the observed changes in the market.
5. Reduce costs
With your business sinking and nearing closure, now may not be the time to pay for cable subscriptions, fly your employees out to take career courses, or sponsor out-of-town conferences. In every way possible, try to limit your costs. Because as much as the tactics above can help you get your business to rise again, incurring too many expenses will see to it that the business is sent crashing down again very soon.
6. Get more funds
For all the accuracy of everything we’ve said so far, there’s no achieving any without a substantial amount of capital, something you probably don’t have at this stage of your business.
However, you need not lose sleep over that too. If your business has been surviving on loans before now, you can reach out to your banks for refinancing. Refinancing will allow you to change your loan terms for a better agreement and will offer you more money to kick your business out of the dust.
Alternatively, you can talk to friends, family, or investors about your current business status, the potential for success, and how you plan on transforming the fortunes of your business. If you put all that we’ve mentioned so far into writing and make them sound convincing, it shouldn’t be too hard getting someone to invest in your business.
But if push comes to shove and you cannot seem to find a willing lender or investor, you can try to self-fund.
To self-fund, you can take up side hustles or gigs that wouldn’t really take much of your time but would help you create an extra stream of income. Becoming a freelancer is one such opportunity. While working your business back up, you can take up freelancing gigs based on the skills you have.
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