She went on to tell me how the summer had been tough, sales were slower than usual and now, months later, she was struggling to catch up. She had vendors calling her because she was late in 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 guts to reach out and 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 some 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 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. I didn’t think I had anyone to share the anxiety of my challenges with on more than just a superficial level. I kept my worries and shame inside.
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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, but the primary ones are:
- a poor business model that fails to give value to the customers;
- lack of profitability that can be directly related to high expenses or low margins;
- low sales as a result of poor marketing;
- dysfunctional leadership that results in the inability of the team to sustain focus;
- inadequate cash reserves to see us through growth spurts and slow times.
Businesses can struggle when we suddenly have more competition, increase our overhead or hit a speed bump in the economy. The reasons are varied but the results are the same: not enough cash to adequately fund the business and a stressed leadership team.
So what do we do if our business is failing?
Get a bird’s eye view
So often, we get caught in the weeds of the business that we don’t take the time to stop and see what’s really going on. Taking an afternoon or a whole day to examine the root causes of our problems can give greater clarity on the challenges we face and possible solutions.
Understand your financials
Many business owners look at the bank account as a gauge of how their business is doing. In reality, they need to understand their financial reports. Knowing what the numbers mean and how to make a difference to the numbers 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.
Understanding if your margins and expenses align with others in your industry can enable you to make 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 we can add value to our customers and retain their patronage, we can adjust our methods to encourage them to participate in more frequent business transactions with us.
Marketing is changing, and many businesses are repeating strategies that worked for them in the past. The key to effective marketing is capturing 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 to your marketing. If we understand the behaviour of our ideal customers, we will be able to 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.
Closing a business is costly, stressful and depressing. But if we turn our business around and still want out, we can save face and money. Getting the right guidance from a business coach or other professional can not only save money but also reduce your stress levels.
You might be discouraged or even feel like crying when you reflect on your business and its difficulties. But if you take the time to change your approach and reach out for help, you will more likely succeed and minimize your stress levels.
As a wise woman once told me, your pain today will be your strength tomorrow. Don’t give up!
Dave Fuller, MBA, is an award-winning business coach and a partner with Pivotleader Inc.
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