There are a lot of ups and downs in the commercial sector. No business will enjoy perfect trading conditions all the time, and no company boss can afford to act as though it will. While it is vital to make the most of the good times, some might say that the real skill in business lies in being able to face up to tough times and come through the other side stronger and more competitive. If your company is struggling, don’t despair. Here are some pointers to getting it back to where it should be.
1. Face big challenges head on
When your business is in trouble, there’s no point in pretending that everything will be fine if you continue to manage it as you always have done. Adaptability is key to business success, and that applies now more than ever. As the person at the top, the buck stops with you, and part of that responsibility includes being prepared to make difficult decisions. Your turnaround strategy is likely to involve significant cost cutting, and that may well mean making good people redundant. It won’t be easy having to let these people go – but if you don’t make that tough call in time, you could find yourself running out of cash completely. If your business goes bust, you won’t be employing anyone at all.
2. Find creative, imaginative solutions
Look at every part of your business and consider whether radical changes are needed. Think about innovative solutions to specific problems, rather than simply following the same old templates. Try to develop new concepts and service delivery models, which can often be put into practice much faster than developing brand new product lines. Outsourcing and resource sharing can sometimes save significant amounts of money, although you should be careful to ensure that any new partners are a good fit with your business. If one reason for your problems is a poor image with customers, look for ways to improve this that can be implemented immediately and don’t require the services of consultants.
3. Listen to your customers
No business can pull itself back from the brink if it doesn’t have its customers on board. That won’t happen unless they feel they’re being listened to, so make a real effort to understand their complaints. If they tell you that they’ve had difficulty resolving problems, that suggests failures in your customer relations – a common and serious flaw. If they’re unhappy about responsiveness, your first priority should be improving efficiency there. Be prepared to hear things you don’t like, such as that one of your pet projects is in fact an expensive dead end, and to act accordingly. Don’t concentrate entirely on the negatives – take note of what your customers do like about the products and services you provide and put an emphasis on making those even better.
4. Keep your sources of finance in the loop
It’s vitally important that banks, creditors and other providers of funds are kept up to date with your turnaround strategy at all times. You must keep lines of credit and cash open, otherwise your company will have no way of financing its continued operations and will almost inevitably fail. Develop and enhance relationships with key contacts and offer them as much information as possible about what you are doing to turn things around. If you previously provided monthly statements, try to offer weekly summaries as well in order to increase confidence in what you’re doing. Highlight improvements you have already made and the effect they have had on your cashflow and return on investment.
5. Make sure you can keep it up
Turning round a failing company is very rarely a quick or easy job, but once the corner has been turned there’s a temptation to sit back and relax. Don’t do it; it can very rapidly lead to disaster. Maintaining sustainable growth is vital to restoring your business’s health and reputation with its customers, suppliers and finance providers. Especially if you’ve had to make staff redundant, spend time rebuilding morale among those personnel who remain and making them feel like an integral part of the company’s future. Keep improving the quality of your products and of your customer service, and keep looking for new opportunities, alliances and markets.
About Carson Derrow
