If your sales are struggling and revenues are falling, it's essential to conduct a full review of your business to understand where things have gone wrong and where the opportunity lies for turning things around.
If you’re a fan of reality TV business makeover shows, it’s a formula you see all the time, from Gordon Ramsay to Tabatha Coffey, conducting a full review of your business is essential to understanding where things have gone wrong and where the opportunity lies for turning things around.
This is, of course, easier said than done when you are living and breathing this stuff each day, but here are some tips that can help you stand back from your day-to-day business and build a plan for a successful turn-around.
1. As the Owner and Manager, It all Starts With You
Be honest, are you running your business as it should be run – holistically, with an eye on strategy and a finger on oversight, but without being buried in the day-to-day minutiae?
This is a toughie, especially if you are new to business or have experienced sudden growth. Running a business is not like having a job, unless you provide a very niche service to a small group of clientele, it’s rare that you can do everything yourself.
If this is you - try to step back and understand where you need help, whether it’s with accounting, marketing, building a better business Web site, or empowering your team, do it, it’s worth the investment. If you can’t afford help in these areas, consider outsourcing certain functions.
2. Embrace, rather than Retreat from Market Forces
Understanding and keeping a finger on the pulse of your industry is fundamental. Ask yourself – has the industry changed, do you still have a full grasp of the market and goals in place to go after that market? What is the competition doing? If they are doing well, take a hard look at what it is that you think your business is doing wrong, in the light of what your competition across town is doing right. Next find a way to re-connect with your target market using those lessons learned - whether it's diversifying your products or correcting your price points. Embrace, rather than retreat from market forces.
For tips on getting a sneak a peek at the competition, or even snuggle up to it, read: 5 Tips for Getting to Know Your Competition and using it to Your Advantage.
3. Give Your Customers What they Want
One of the hardest parts of running your own business, is giving customers what they want, not what you think they want.
It sounds obvious, but to go back to the Gordon Ramsay model, when Ramsay reviews failing restaurants on his show Kitchen Nightmares, he frequently finds that the reason so many restaurants fail is that the restaurateur lacks a clear vision for his market, is not really in tune with his customer needs, and ends up trying too hard to keep everyone happy by offering hundreds of dishes but invariably fails because the restaurant can’t prepare a single dish well.
4. Manage your Inventory
Retail stores and restaurants have to manage inventory. If it doesn’t shift it quickly becomes money ill-spent and dated. Your accountant can offer guidance on finding new and better ways to handle your inventory, including re-stocking, and its impact on cash flow and profitability, reporting inventory for tax purposes, warehousing, and how and when to take inventory. Learn more in Barbara Weltman’s quick guide: 5 Things to talk to Your Accountant About.
5. Review your Pricing Policy
Review your cost base (constantly). Do you need to adjust pricing - how will this impact your customer relationships? In reality, a low pricing strategy may increase customer interest but result in lost revenue, while a high pricing strategy may alienate customers. For help with determining the best pricing plan for your business, read Balancing Profits and Customer Service: Tips for Determining Effective Pricing Policy Practices.
6. What’s Your Image?
Perceptions are created based on several things – your product, price, your service, ease of doing business with you, your location, merchandising, and of course your marketing (signage, ads, Web site, etc.).
If you have doubts about your image, or want to shake things up a little, small business blogger Rieva Lesonsky offers tips on how you can use all these elements to enhance your image and Get the Customer Service Edge.
7. Revisit Your Business Plan and Plan Ahead
What were your original goals and how did you plan on getting there? Have market forces changed? Is there a new competitor in town? How is your budget? If it’s going to take a new approach to get where you need to be, make sure you revisit your plan, benchmark your goals, and outline the elements that will help you get there (staffing, new markets, etc.).
8. Manage Cash Flow and Keep Good Records
Do you know where your money is going? Are you budgeting wisely so that you know the interval of your monthly income and outgoings? Cash flow is the lifeblood of your business. If you need to get a grip on your cash flow to help you ride the highs and lows of business read: Understanding and Expanding Cash Flow.
9. Help Your Staff Help You Succeed
There are many ways of building successful teams that deliver exceptional customer service and ultimately help add to the value of your brand and improve sales - from employee incentive programs and empowerment activities, mentoring team members, hiring motivated employees, and more. These two articles offer some easy-to-implement techniques for building powerful teams in the small business workplace:
- Growing your Business as a Team: 10 Team Building Tips from the Real World of Small Business
- Get More from Your Team - 5 Employee Incentive Program Ideas that Pay Off
10. Get Help
Getting outside help, whether it’s in the form of free guidance or mentoring from experts at SCORE, your local SBDC, or SBA office, can help you objectively assess the state of your business and build an approach for turning it around.
Related Articles
- How a Simple Business Plan can Get you from A to Z, and Navigate all Things In-Between
- When Something’s Got to Give – Outsourcing Options for Your Growing Business
- 5 Tips for Finding and Working with a Mentor
- Start-Up Survival - Making it through the Early Years (a Year-by-Year Guide)
- Are You Ready to Grow Your Business? – Five Tips to Help You Prepare for Growth
