When your business faces failure, there are only two options. First, you can give up and start to divest yourself from the business. This allows you to rescue resources and maybe even break even. Second, you can give it one last try and hope to turn things around. The second option is very risky and is a gamble. But if it pays out, then you will have saved your business. There are several things you can do, especially if you are still early in the downward spiral for your business.
Be Careful With Your Cash
The very core of any business is to have capital and liquid cashflow. The moment that your operation runs out of funds, then your business stops. You won’t be able to pay for anything from materials to employees. While you still have spare cash and are still earning money, you should start changing things. For one, reduce expenses as much as possible. Look for ways to save money, like eliminating business expenses and unnecessary purchases. The other way to make your cash flow better is to have effective payment collections. Customers should pay you immediately so that you can have more money in your reserves. Give incentives like early payment discounts while also making it easier to pay. As for the extra money, set it aside and be careful with it. Only use it when you can be sure it will benefit the company.
Cut Out All The Fat
A lot of companies have a lot of extra assets that are useless to them, or they don’t need immediately. You need to trim down on them and turn them to your advantage. For example, many businesses don’t need an office nowadays. Have the company work from home, and you can save on the rent for an office. Other businesses might have assets that they can rent out. Construction companies usually have heavy machinery they can lease out when they are not in use. This allows you to earn money from them without even using them.
Restructure Your Company
If you want to save your company, you need to be willing to change things inside it. You should do a company audit and identify what exactly is causing you to lose money. Be ruthless about it so that your business has a chance for survival. For example, if you find that an entire product line is losing you money, then it is time to eliminate it. Other changes that you might make can mean improving the efficiency of your systems. This goal is to ensure that your processes focus on making you a profit in the long run.
Change Your Image
Most of the time, companies have an image associated with them. If your business was dying before, then you need to refresh that image as a sign that you are back in business. Work with a brand consulting company to find the right sort of message that you want to deliver to your customers. This might even result in a complete redesign of your product or service. The important thing is to draw in as many new customers as possible while keeping your current customers.
Find The Right People
Bringing your company back from the brink of disaster is going to require you to have a good team. The goal here is to hire slowly while firing fast. As part of the changes, you should look at your current employees and layoff the non-essentials and low performers. You only want the best people working for you along with those that believe in the company. Meet with the remaining employees and hone them into a team you can trust by communicating with them regularly.
After that, you should focus on hiring a core team of people that can help you build back the business. Be strict about it and be ready to spend some good money since hiring turnaround specialists is not cheap.
Additionally, you might consider outsourcing a lot of your functions. Customer service and accounting are two examples of services that would have lower costs and be more efficient when you take them to outside experts.
Pulling your business back from the brink is very possible. It will take a lot of hard work and discipline, but it can be worth it. However, you also have to prepare yourself. There is always a chance you will fail so be ready to accept it and move on. Have a specific goal and a deadline for your attempts. If you haven’t hit your target by then, you should start preparing your business exit plan.