Everyone who starts a business starts it with great passion, strong ambition, and a clear vision. However, things don’t always go the way the founder of a business wants them to. When people see a failing small business, they can wrap up the whole discussion within a second by saying something along the lines of, “Just shut it down.” What they don’t realize is that shutting down a business is a much more difficult decision than starting one. No matter how unadvisable, there is an undying emotional attachment of a business owner with his/her business. So, what can you do if your small business is not performing well?
Pinpoint the Reasons for Failure
What do the doctors do when patients go to them with an illness? They don’t hand over a bunch pills, and tablets straight away do they? The first step, of course, is the diagnosis of the issue. Once the doctor knows the problem, he/she can prescribe the right medicine. This is exactly what you have to do with your business. The first thing you have to do is make efforts to pinpoint the reasons and problems that are causing your business to fail. If you don’t have the expertise, you should hire a professional accountant to look into your profits, losses, incomes, and expenses. Maybe you are doing business perfectly, and it is just your tax calculation that is causing the damage.
Don’t be the Business
Many times it is the owner who causes the failure of a business. When you think you are the business, this is the recipe for a business’ failure. You must learn to delegate responsibilities and become comfortable with the idea of taking help from others. Don’t act like an owner when it comes to using the money that your business making. Keep yourself on a salary, and this salary should be based on the current condition of the business. Make the team and involve some of your best employees in deciding what the solution to the problems should be. You are in the business, and so you will see everything from your perspective. A neutral person will tell you what they find lacking in your business strategy.
You have to be very patient and understanding when you ask others to help you. They might point out factors that you might not like. They might even raise questions about your strategy, and that’s when you have to show real patience.
Use the Funding Options
Sometimes, you just start on the wrong foot. You are so eager to start your own business that you don’t even arrange the proper capital to support it. You might spend too much on arranging your office furniture and be left with nothing to spend on marketing. In this particular situation, you want to arrange funds to meet the needs of your business. Whether it’s marketing, the lack of staff or the wrong location, you can fix any of those issues when you have the money. If you think your business is built on a unique idea and that more people need to know about it, you should look for ways to arrange the funds.
Look around, and you might come across friends or family members who could help you arrange some funds. If you don’t have any contacts that can help you with business funding, you should consider online crowdfunding. You always have options like Funded.com available to arrange the right funds to support your unique business ideas. The thing about online funding is that you can always find people who understand your idea no matter how unique it is.
Set Goals and Measure Their Progress
No matter how hard the times are for your business, there is always going to be a way out. However, the emotional setback and mental stress that come with business failure can eat up your positivity and optimism. Despite such hardships, you have to know how to set realistic goals and achieve them. Set defined realistic and achievable goals and measured the progress. When you are facing hard times, you have to set small goals. It is important at this point that your goals are defined in the form of numbers. The ambiguity of goals makes them less achievable. If you are losing customers and you want to retain them, you must first know the rate at which you are losing them.
Now, the example of a weak goal at this point will be setting something like, “I will not lose customers in the coming month.” That’s an ambiguous goal, and no set point will define how badly you have failed or how tremendously you have succeeded. Instead, you should set the goal by first defining a period during which you will calculate customer retention or attrition. Secondly, you will calculate the customers acquired during that period. Thirdly, you must know how many customers you had at the start of that period. You will now set your goal regarding retention percentage during that period.
Reconsider Your Pricing Strategy
More often than not, businesses fail because the owners don’t set the right price for their product or services. You might be pricing your products too low or too high. What if you have already started charging your customers for the value you haven’t provided them? A business must price its products/services to cover their expenses. Later, the business can start making a profit. The third and last stage is to charge for the business value. You have to be constantly looking into your customer data to know how much value your customers find in your services/products before you charge them for it.
As mentioned earlier, it much more difficult to shut a business down than it is to start it. Furthermore, you cannot let go of the mission and vision that’s associated with your business that easily. For this reason, you have to show tremendous perseverance, patience, and determination, and try all your options before deciding to shut down your business
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