Every company has its bad times and good time. Surviving the bad times become the major turnaround for businesses. Most big companies in the world have in one time or the other, suffer some set backs in production. The classical example of Apple failing in 1997 and Steve Jobs returning with some tough decisions like reducing product line from 350 to just 10 deserves a mention here. The rest, as we all knows is history. Some of the basic ways to save a failing company are:
Businesses don’t fail overnight as signs begin to appear over a period. Sometimes these initial indications might get overlooked when companies are busy dealing with day-to-day operations. Internal audit of employee & customer satisfaction, tracking financial health and order book and staying on top of industry offerings, should be part of any company’s culture. These are some crucial aspects of business and any hiccups around them are a sign that you must start looking for faster and smarter solutions.
Some of the measures around these hiccups are cutting operational costs, re-visiting company’s strategy, re-branding businessor innovatingproducts to focus on new geographical location. Sales and finance functions of an organization help in deriving insights around these decisions.
Invest in Employee Trust
This is one profitable investment even in times of trouble for any business. Employees can achieve business KPIs with optimal efficiency even during tough times if they are provided with the right direction and motivation to deliver.
Transparent communication with a clear business vision will make them align with desired business objectives. Invest time and efforts to help them achieve smaller targets with a vision for the long term. Keeping their trust and motivation intact is of utmost importance,after all happy employees means happy customers.
Customers are indispensable. Decrease in customer base can have different reasons like change in customers’ expectations, better substitutes, price-wars among competitors or weak marketing and after sales services. Profitability is directly proportional to satisfied customerswhich is achieved through acustomer-centric approach.
There is a demand for every great idea and excuse like immature market holds no evidence. Sometimes, altering your current products and services would work for you and sometimes adopting an advanced and fast technology could be your savior.
Finding out your niche and matching customers’ expectations can land you up in sweet spot for saving your business.Time is a major factor here,and businesses have to act quick and smart in adopting and implementing.
Manage Cash Flow and Resources
Managing cash flow is important for any business, even more for a growing business.
When your business is not doing well, it is advisable to project and track cash flows on a weekly basis that you can later move to monthly upon achieving stability.
Keeping an eye on working capital and trying to convert receivables into cash inflows should be a priority. Communicating any delay in payments to your creditors will hold you in good state while a strategy should be adopted to get the payments from your debtors in the form of advance payments, discounts on instant full payments, quick follow-ups with slow paying customers.
Shortage of funds even to meet basic amenities of running business like pay cheques, paying vendor and other bills is a vital sign that a business is experiencing a tough phase.
Businesses are profit-making organizations and should always vouch for making profits for employees and stakeholders, without compromising on customers’ expectations.
Reducing operational expenses by cutting unnecessary expenses and keeping a tap on monetary benefits for a while can save you some precious dollars, putting them into more beneficial use. Although cutting costs is not the solution for reviving business, it will give you excess funds for some time to allocate resources to the most essential business needs. Do not rely on saving money from cost cutting, rather look out for ways to make company profitable in long run.
ABC of Marketing Strategies
Sometimes a failing company might be doing everything right – right product, identifying the right customer base, right pricing but their marketing is not able to convince customers to buy their products. The right way out for this is to evaluate the right marketing mix for your customers with right message and pitch.
It is not advisable to imitate your competitors. Figuring your own strengths works for a business. Investing a lot of money in short-term tactics will not work for your targeted audience while investing the same amount in right marketing tactics can give you expected ROI.
Don’t Shift Focus – Stay Lean, Hungry and Passionate
While saving your failing company, you should not shift focus from business objective to drive efficiencies and profitability. Discounted pricing, cost-cutting and boardroom meetings are short-term solutions and can never substitute for real doings that a company need swhen it is going through a trough.
The right thing to do here is to take a fresh approach for long-term sustainability. Any pre-conceived notions will make you less open to new ideas that may be the solution you are looking for.
Summing up, internal factors are relatively easier to control compared to external factors but one should also plan and hold on their best practices to face any external challenges.