Hopefully you will never need this advice, but if so, this article may save your business. Many entrepreneurs don’t even recognize that their business is failing until it’s too late. The lack of experience and sophistication is the most common reason for being blindsided by a failing business. The most glaring sign of a failing business is the lack of cash which causes symptoms such as being late on your bills, not being able to make payroll, and being late on your rent. These are obvious signs that any entrepreneur will understand. Here are some tips to help save your business:
1. Devise A Plan – As long as you have some type of emergency plan, you still have hope. You need to have an emergency plan that outlines the steps you need to take to reconstruct your business and return it to a level of stability.
2. Meet Your Creditors Head On – Make sure that you meet your creditors head on and never run from them. Explain the situation to them and let them know that you are in the process of reorganizing and have every intention of paying your obligations. Ask them for longer credit terms or a reduced payment plan until you are able to get the business back on solid ground. People do not like it when they perceive that you are running from them. Be proactive and be honest about your situation. One of the biggest mistakes is to promise something that you cannot deliver. Creditors may not like the fact that you are not able to pay your bill in full, but they will respect you for making realistic payment plans.
3. Cut Costs Down to the Bone – Drastic times call for drastic measures. Sometimes business is cruel. There are times when you have to make tough decisions about laying off employees and reducing expenses. Every aspect of your business should be examined to determine if you can cut costs. Remember, if the business is not profitable, everybody goes down with the ship. As the leader, you must do whatever is necessary to right the ship.
4. Reconstruct your Business – Once you have made all the necessary moves to get your business on the right track, reconstruct or reinvent your business based on your new reality of what your business now is. Many businesses start out with a certain concept and morph into a totally different business. One case study I was reading was about a young lady that loved to bake pies. She made some of the best pies in her neighborhood and many of her family and friends would request her to bake pies on special occasions. After years of encouragement by family and friends, she opened her own little storefront pie shop. Her pies were in such demand that she could not keep up with the orders and the joy of baking pies turned to stress. She became overwhelmed; working fourteen hour days, managing employees and running a business were too much. Running the store became a stressful job that she created for herself. After many months of agony, she decided to close her retail pie shop and focus on supplying local bakeries with wholesale pies. She reconstructed her business and ran the business on her terms. She negotiated the maximum daily number of pies she could supply each bakery with, and she only worked from six o’clock AM to twelve noon. She made more money, had less stress and enjoyed making her pies again. She reconstructed her business to make it work for her.
These are just some ideas to help get your business back on track if it starts to flounder. I recommend that you put benchmarks, policies, and procedures in place to review your finances and operations on a daily basis. The faster you can identify a problem, the easier it is to rectify it. Feel free to comment on my blog post and let me know what you think about the article.
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