10 Steps to Turnaround a Struggling Business
Updated: Jul 18
When your business is in trouble, there are three key rules-
1. BE HONEST WITH YOURSELF AND OTHERS
2. MAKE A PLAN
3. ASK FOR HELP
So, here are 10 tips to turnaround your business:
1. Don’t bury your head in the sand and hope for the best!
Sit down and be honest with yourself and both your business and personal partners about the state of the business. You will be surprised how supportive they can be and they can also come up with suggestions you may not of thought of. Ask for help from an experienced person you trust or an industry professional.
2. Rewrite Business, Sales/Marketing, and Operation Plans
Although every situation is different, these issues require their own unique and clever alternatives, and there always are alternatives.
Investors, management, the bank, and employees all need to know what the company’s future plans are. They need to see where they fit in, how they can help, and how they can share suggestions based on their expertise.
Plans set a path for the future, taking in the past present and future of your business. Companies that write and follow well-thought-out plans are much less likely to get into trouble. But a good plan when you are in trouble can get you out of it.
Yes! You may feel a failure but suck it up and make a plan.
Turning around a business takes huge amounts of both time and energy. But it also takes a plan! I have yet to hear of a business succeeding without a solid business plan.
3. Meet with Key Personnel
You must get the key people in the business together to have a no-holds-barred discussion on how to fix the company. Don’t go into the meeting without a plan of your own. But remember to be flexible with it, others may have ideas and solutions that you have not thought of.
The key in this type of meeting is to be self-assured, open-minded, and flexible.
4. Revise Plans
After listening to key personnel in the business and discussing important aspects of your plan, revise the plans again before presenting them to the board of directors and employees.
5. Meet with Employees
Admit to the employees that the business is in trouble and outline the managements plans to turn the business around.
Provide employees with relevant parts of the business plan and ask for their input. This can help the employees feel part of the process and part of the “family”. This can lead to enhanced performance and new ideas.
6. Meet with Customers
Rumours will whip around the community. Customers will become nervous and some will even look for new vendors. Don’t stick your head in the sand. Inform your customers about your situation and tell them how you plan to correct it. Be reassuring, but not deceitful.
7. Meet with Suppliers
Suppliers will get very nervous when they hear “on the street” that one of their customers is having trouble. You need to develop a prepared statement outlining the problems and how you plan to deal with them. You will receive plenty of concerned telephone calls. Respond quickly and thoughtfully to all of them.
8. Contact Tax Authorities
If you can’t pay your taxes, notify the relevant offices immediately. Tax offices will usually work with you by deferring payments to a later date or offering a payment plan but don’t just fail to pay, this will only cause more problems.
9. Contact Your Bank
Contact your account manager and tell them you need to meet in person. Give them the full story and accurate current situation, followed by your plan of action. Appear confident and reassuring.
10. Cut Unnecessary Costs
Make a list of all your expenses and eliminate what you don’t need. You need to buy time in order to fix your problems. This includes staffing and opening times. Along with items you sell, get rid of the worst performers and the low profit items and focus on a core range.
But don’t cut the quality!
Can you shut in the afternoons and reopen in the evenings? Are lunchtimes profitable?
I have known businesses that have closed in the days and open six evenings a week with the owners taking full time jobs during the days to pay bills.
Do you open for breakfast or late nights are these times profitable?
Cuts need to be deep and hard. Remember if things pick up then you can slowly retry opening at different times but focus on your busiest and most profitable times.