A business performing poorly can be blamed on several factors: weak market, improper contract management, incompetent staff, ineffective marketing strategies, etc. However, to be honest, it doesn’t really matter what is causing the downfall. What’s important is the steps taken to ensure that the organization does not go under.
Starting an enterprise, especially from scratch and without any financial backers, is, suffice to say, extremely difficult, if not almost impossible. Just imagine the heartbreak of a business owner seeing everything he built to fall apart in front of his eyes.
For startup business owners, statistics are not on your side. According to a study done by SmallBizTrends, almost 90% of all startups fail and file for bankruptcy. Every day, 137, 000 businesses are started accumulating to over 5 million a year. Unfortunately, over 123, 300 businesses shut down every day.
More often than not, aside from their time and effort, small business owners invest their own personal money. The unfortunate reality that there is a high chance that it will probably fail is a heartbreaking concept that can easily be avoided with these steps.
If you’re reading this article, then chances are you’re an owner with a struggling business, desperate to save his company. Here, I have listed down some ways on how to save a failing business from permanent shutdown and bankruptcy.
It goes without saying that you should never give up until your company’s last dying breath, and not even then. Keeping a positive mood will allow you a better perspective and outlook, granting you the ability to see some golden opportunities that you can jump on.
Likewise, as a business owner, you have the power to affect everyone’s mood. By keeping things light and positive, despite trying times, you and your company get a higher chance of survival.
Ask For Ideas
According to KEAP, 70% of businesses fail because they don’t recognize, or accept, their weaknesses and don’t seek help from others. Maintaining open communication with your staff is essential.
A good leader would not hide the problems of the organization to himself. Instead, he would be transparent and leave himself open for any suggestions that might prove effective. Do not make the common mistake of being that higher-up that dismisses the ideas and suggestions of those beneath him in position. A different perspective from yours is often what saves the business.
Change Your Business Structure
There is no shame in going back to the drawing board and starting back from scratch. This is often the genesis stories of the big brands out there. Disney, Netflix, and Apple all faced some tough times and their owners had to drastically change their business structure.
If you were to compare, for example, Netflix a year from its birth to the mega-company it is today, the two would be so different.
The market is an ever-changing entity and without adapting to it, your business shall be rendered obsolete by the changing of times.
Improve Contract Management
One of the major reasons why a company might be performing poorly is because of its improper contract management. Compliance may be low. At the same time, the performance of each contract may also be subpar. This is usually taken care of by a Contract Manager but even then, he is still human and has limits.
Research by the independent International Association for Contract & Commercial Management (IACCM) found that over 9% of a company’s annual revenue is lost due to poor contract management.
A contract management software is able to mitigate this statistic, even presenting business owners with full visibility of contract metadata and giving valuable insights such as which contract to renew.
Better Asset Management
Overspending is a problem that you need to identify as soon as possible. A responsible business owner must first put a stop on any unnecessary expenditures.
Cutting costs is a normal business procedure especially during lean months when sales are down. At the same time, think about downsizing. You may have bitten off more than you could chew with your current business model. Take a step back and determine which expenses you can cut down on.