It’s not easy to admit your business is struggling. Not that it’s uncommon, mind you. It’s just hard for anyone to come to terms with seeing problems in their small business. Of course, struggling is very much a part of any business — that’s how you adapt and grow. But it can be hard to navigate the challenges that come with it. The good news is that you can always turn things around and avoid failure. Knowing how to save a struggling small business is already more than a first step in getting back in business. After all, it’s much easier to save a struggling business than breathe life back into one that’s already failed.
There are many strategies you can use to save your struggling small business. Naturally, some are going to be more suited to you and your business than others. Also, it’s much better to correctly implement a few strategies than to get caught up in the middle of a dozen confusing and even contrary “solutions.” That’s why I’ve tried to focus on the more vital steps you need to take to get your small business back on track. So, as you read the following strategies, try to see which ones are better to implement. Without further distractions, here are the most practical steps to saving your business.
How to Save a Struggling Small Business in 9 Steps
It’s easy to list two dozens of “tips” on how to save a struggling small business. In fact, most articles on the subject offer just that. It may feel like you have more solutions to pick from and go through, but instead you may end up stretching your time and effort too thin. When I face a list of strategies to try but have no way to know which are more fundamental, I might make things even worse. So, when you’re deciding on the steps you need to take, make sure to choose the most vital ones.
Enter the Right Frame of Mind
You may think this is not really a step toward saving your company, but, in fact, it’s a critical part of it. Facing the challenges and pressures of turning a struggling business around isn’t possible without the correct mindset. As a business owner and entrepreneur, you need to cultivate and maintain a positive attitude, especially in times of crisis.
What you need to keep in mind at all times is flexibility. Being ready to accept and deal with change doesn’t come easy to anybody. However, when you’re trying to create a big change of direction yourself, it’s imperative to stay on your toes. If one of your business plan steps is not working the way it should, you should be agile and flexible enough to find a workaround and go from there. If you want to be quick about getting your business out of this uncertain situation, flexibility should be at the center of your mindset.
You also want to keep away from those negative thoughts, especially about giving up. When your business is struggling, there will be an almost irresistible temptation to cut your losses and just quit. If you don’t want to see the business you’ve worked hard for go down the drain, you’ll need to commit and recommit. These negative feelings will come back again and again, and it pays to have a way to keep at bay. Some business owners, for example, have found that reading about similar cases helps them stay positive and find inspiration.
The final element of your new mindset has to be objectivity. It’s hard to over-emphasize how many people fail to change their strategies because they have an emotional investment in their businesses. This is actually natural — everybody feels proud of their accomplishments and hates to see them changed beyond recognition. But taking this to a point where you can’t or won’t see the problems with your business is going too far. Remember, you’re a business first, and that means accepting the trends and forces of the market. If you cannot step back and assess the situation from a third-point of view objectively, you will probably not make it.
Write a Smart Business Plan
Chances are, you have a business plan already. So you may be thinking this step isn’t for me. That’s actually not true. To overcome the problems your small business is facing, you’ll need to reconsider and rewrite your normal business plan. Ask yourself if your previous plan had any role in the difficulties you’re facing now. Even if the answer is “no,” you have to go back to basics when reconsidering your business plan. Review your marketing plan, cashflow, and products. As you read this list, you’ll have a better idea of how to save a struggling small business. Some areas will need more attention than others. Try to find and focus on those when rewriting your business plan.
Use All the Tools you Can
Nothing gets done efficiently without the correct tools. This is a universal truth that applies to any business. When it comes to optimizing your business and preventing it from spiraling down into bankruptcy, finding the right tools becomes crucial. You’ll need all the help you can get to manage and optimize your time and communications, so you can deal with the more important issues. There are different online tools you can use to help with the turnaround. RunSensible’s CRM system is an all-in-one master tool with features to help you manage time, communications, marketing, customer relationships, and more.
Find a way to Get More Funding
Having some funds at your disposal can go a long way when you’re trying to get your small business back on its feet. To find the right source to get funding when your business is struggling may not be the easiest thing to do, but it may be easier than you think. Depending on where you live and what you do, you have more or less of a chance to get a loan from your bank. There are also other funds and loans designed for entrepreneurs, and I’m sure you’re familiar with some of them. Try to hit them up and see which ones match your conditions. Don’t assume that your business facing problems means that no one is willing to fund you.
When you go looking for venture capital firms or other investors, it’s critical to seize every opportunity. To make the necessary impression, you’ll need to track all opportunities and know when to communicate and what tasks to complete for each stage of each VC opportunity. That’s why RunSensible’s Opportunity Manager is a popular feature with startup companies. In fact, we have a special program for startup companies, offering our business management software and CRM for VC at a considerable discount.
Stay in Touch with your Customers
Have you been losing customers? Were you planning on a large customer base but it didn’t pan out? This is actually a very vital answer to the “how to save a struggling small business” question we are discussing. We’re definitely dealing with a customer relationship problem here. That means the first step toward a solution is to improve your customer relations using the proper Customer Relationship Management software. Retaining your existing customers is a vital part of guaranteeing more sales and a thriving business. Actually, a recent study has shown that repeat customers are likely to be responsible for nearly 60% of the sales in small businesses. You’re also much more likely to sell your products and services to existing customers than to convert new leads into customers. To actually hold the customers you do have loyal and coming back, you need to keep reminding them of your brand. With RunSensible, you can automate email marketing to make sure you’re always in your customers’ minds.
Have you been getting too many complaints about your product or service? Turn those criticisms into valuable insights into improving your business. You should specifically reach out to your customers to get a better idea of what’s wrong and what’s right with what you’re doing. Hearing about their needs and pains from customers themselves is an invaluable asset to reviewing your business plan. So, make sure to use your customer base as a source of advice. That means using a customer feedback tool like RunSensible’s feedback tools.
Handle the Creditors
Now we’ve reached the point where a lot of people who run their own small businesses run into trouble. Being in debt is one of the worst things that could happen to a person, and the stress of having to negotiate with creditors is enough to drive someone to want to run and hide from their problems. It’s only natural for that to be the case; nobody enjoys the added stress of having to deal with creditors on top of everything else. If you want to be successful in turning things around for your company, however, hiding is not an option. Instead, you should try explaining the situation to your creditors by having a conversation with them. Be truthful and forthright, and make it a point to contact the other party first if you have any reason to believe that you won’t be able to make the payment. When your creditors see that you are making progress in spite of the fact that you require assistance in getting your business off the ground, they will be more likely to assist you rather than cut off your access to funds. Therefore, maintaining open communication channels is the only way to save a failing business, regardless of whether you are working with a bank or other businesses providing a product flow. At the end of the day, creditors want their money back, and they will assist you if they believe they have a better chance of getting it once you are doing well as a business.
Manage Cash Flow
This may sound more than a little frightening, but rest assured that it is not something you will be unable to deal with. When we talk about cash flow, what we’re really talking about is how much money “flows into” your business and how much money “flows out” of it. That translates to the fact that your cash flow is the difference between the amount of money your company brings in and the amount of money it shells out during a specific time period. A positive cash flow can be said to exist in an organization when the amount of cash received is greater than the amount of cash spent. Creating a positive cash flow and ensuring that it is maintained is an essential component of the operation of any successful small business. A cash-flow deficit will make things more difficult for you, and it’s possible that you won’t be able to pay your employees on time or even make the rent on your office space.
Even though they are making a profit on paper, some businesses will still have a negative cash flow. Although the term may sound peculiar, there is a good reason why it is called cash flow. Therefore, even if you have successfully converted a large number of customers and sent out a large number of invoices, you still have no actual cash flow coming in until those customers pay those invoices. Therefore, the cash that is coming into your business consists solely of cash — that is, liquid assets and money that is kept in the bank.
This delay is the primary contributor to a large number of cash flow problems. You never use credit or debit cards to pay for anything, but billing and waiting for payment is the norm for your business. This could be because you offer a free trial period or some other type of incentive. Restructuring your budget to ensure that your company has sufficient reserves to get through the transition period is one strategy you can use to break free. After a few iterations of the product and sales cycles, you will have successfully converted your profits into a positive cash flow. This will free up some more money in your budget.
Conduct a SWOT analysis to reevaluate the situation.
This is sound advice to follow, regardless of the stage or condition your business is currently in. You will gain a better understanding of your company by conducting a SWOT analysis. A SWOT analysis is essentially a review of the strengths, weaknesses, opportunities, and threats facing your company. Although a SWOT analysis is typically used in the process of developing a business strategy, one could argue that it is of greater use when applied to a company that is experiencing financial difficulties. It is essential to establish appropriate priorities whenever your small business is facing a critical situation. When you conduct an analysis of your company using the SWOT framework, you will obtain a crystal clear picture of the steps and strategies that you should pursue first.
When conducting a SWOT analysis, it is important to have more than one person present because no one person can see the big picture undistorted. This holds doubly true for you as the owner of the company. Make an effort to make use of the insights provided by your employees, even if your company only has a couple of workers. Additionally, make an effort to be as honest with yourself as you possibly can. Acknowledge any shortcomings that your company possesses head-on and look them square in the eye. You won’t be able to find a solution to the problem unless you have that first.
Reevaluate your product’s brand.
Rethinking your brand may involve something as simple as updating your company’s logo and website design, or it may involve going as far as changing the name of your company or completely reinventing its identity. Your company may require a shift in strategy in order to get back on its feet; one option for this is to reinvent it. There are more than a few examples of small businesses, most of which are located locally, that have gone from the brink of failure to success and growth by embracing the revolution that has occurred online. That’s just one of many ways to give your company a new lease on life. Some businesses have achieved greater success by taking the opposite approach and concentrating their efforts on a smaller geographical scale. Make an effort to identify successful strategies, then adapt your brand to reflect those strategies.
Consider Reducing Intensity
I saved this for last because it really should be considered your very last option. I’m talking about layoffs. Eliminating employees as a solution is not really a good idea, and it may have a negative impact on morale that lasts for a long time. However, if you believe that the only option left is to close your business and lay off some of your staff members, then it makes perfect sense for you to take that course of action. Even in this scenario, you should exercise extreme caution when selecting the workers who will be terminated from their positions. You have to hang on to the employees who are the most valuable to your company. Also, try to complete the entire cutback in one fell swoop. Firing people in stages gives the impression that you are participating in a survival reality show, which is an unpleasant experience.
Time to Save your Struggling Small Business
Okay, here’s the most crucial step of all — actually starting the turnaround. It’s easy to let the inertia take over as you wait for the “right time.” The only time to change things for the better, however, is this very moment. So, now that you have an idea on how to save a struggling small business, it’s time to put these tips and strategies to work. So, do not hesitate to turn business into a thriving success and an inspiration for other struggling businesses. Of course, following through with some of the most vital steps we’ve discussed needs access to the right tools. With your industry-standard CRM and business management software, you’ll have to get two or three different apps or a really expensive piece of software — or, you can simply get RunSensible. Go ahead and sign up to get RunSensible for free.
FAQ
What is the most important step in saving a struggling small business?
Perhaps the most important step is entering the right frame of mind — to stop thinking like you’re already defeated is as vital as anything. After that, the most critical steps are cash-flow management, searching for new funding opportunities, and reeling back existing customers.
Do I need to get tools like CRM and management software?
The short answer is yes; if you want to give your small business every chance at bouncing back and thriving again, you’ll need the right tools. Of course, you can try to do everything by hand using spreadsheets or even paper and pen to plan and keep track of everything.
How does RunSensible help my business?
RunSensible offers a huge set of features and tools that help you save time and money while avoiding all the hassle that goes into guesswork and manual business management. Read more on how RunSensible will help your business or just sign up and start using it for free.
Is RunSensible a free CRM and business management software?
Yes, it is. You can sign up now and start using RunSensible for free, and that’s not just a trial. Use RunSensible’s valuable tools for free and save your budget for saving your struggling small business.
