A key characteristic of entrepreneurs is that they are risk-takers. This means that they take calculated risks in order to distinguish themselves from their competition and achieve success. Sometimes, these decisions don’t work out. Sometimes businesses fail. And even though no one starts a business venture with the intention of failing; failure is indeed a harsh business reality. How you deal with this failure will determine whether or not you will ultimately achieve success. In this article find out what you can do if your business is failing.
1.FIGURE OUT WHAT WENT WRONG
Try and find out what went wrong. Start from the beginning, from the moment you made your first investment towards the business. Then look at the sales processes, your business strategy, and finally your clients. Take note of the biggest contributing factors. This will help you improve these areas for your next venture.
2. PERFORM A S.W.O.T ANALYSIS
The S.W.O.T analysis is a framework analysis used by many business owners and entrepreneurs in order to strategically plan out their venture. It is a technique used to assess a company’s performance, competition, risk, and business potential.
This looks at what your company is good at. What your business excels at and your competitive advantages.
This explores your company’s weaknesses and probable failures. What is it that stops your company from functioning at optimum levels. Now find ways to make immediate changes to ratify the situation.
Think of all the possible opportunities from external factors that can give your company a competitive edge. For example, good advertising to attract potential customers. Or branding and providing top-tier products.
This looks at all the potential factors that could harm your business. Once you have stablished these threats, quickly work to minimise their threat to your company.
3. ESTABLISH S.M.A.R.T OBJECTIVES
S.M.A.R.T objectives provide clarity and help you stay focused on working towards achieving your business goals.
Be specific about goals and what you want your business to look like. For instance, you can be specific about the profits you’d like to make each month. This will enable you to work towards achieving this by setting a specific number of sales you should make.
This means that you work out whatever profits you’d like to make from your business by the end of a specific period of time. This then means that you calculate the rate at which you need to work each day to determine whether or not you’ll be successful in achieving this goal.
This aspect focuses on setting yourself an achievable goal. This is important because if you set a goal that is way out of your grasp, you will eventually get discouraged because you’re nor reaching it.
It is also important for you to be realistic about your business strategy. There’s nothing wrong with being ambitious, however it is also important to be self-aware. Success doesn’t happen overnight.
A good business strategy also includes reasonable deadlines. Honour your deadlines in order to ensure that your business succeeds.
4. CONNECT WITH YOUR CUSTOMERS
If you’re not staying in touch with your customers, then your company will simply not succeed. Customer feedback is an invaluable resource that all successful companies take advantage of. Talk to your customers and find out how your company can best serve them. This will enable you to improve your company and you’ll be able to find out what does or doesn’t work.
5. CUT COSTS
When your business is failing, you need to save as much money as you can, while you still can. Unfortunately, this also means that you may have to make the difficult decision of laying off some employees. One of the most difficult tasks you will be faced with as an employer is having to fire/lay off employees from time to time. As difficult as this may be, sometimes this really is the best option for the business. It would be better to keep some employees than have everyone be unemployed if your business completely shuts down.
6. COMMUNICATE WITH YOUR CREDITORS
You may have come into some debt in an attempt to save your company; a reality for many business owners. The best option is to contact your creditors and let them know about your financial predicament. Ignoring them or trying to avoid them will only make matters worse. Here are some steps you can take to settle some of your debt:
File for Bankruptcy
As a last resort, you can file for bankruptcy in order to save your company. It can help to reduce the burden of your business debt. If your business has assets that are worth less than your debt, bankruptcy may allow you to pay only what the assets are worth and not the entire balance due.
Liquidate your Assets
Liquidation of assets is the process by which company assets are converted into their cash equivalents. You can then negotiate with your debtors on the distribution of the money. Most creditors will usually accept this payment because the cost of litigation is far more expensive.
It took Thomas Edison 1,000 attempts to finally succeed at inventing the light bulb. When asked about his failures, he simply said; “I have not failed. I’ve just found 10,000 ways that won’t work.” Take this as encouragement, and pick yourself up, dust yourself off and get back to work. You now know what doesn’t work for your business so you can work on improving what does and doing better.