When things are going well, and when things are just starting and picking up steam, it’s pretty easy to give advice and stick to the fundamentals that business owners should know. However, when things start going another way, it can become a lot more difficult to take action. When your business isn't going as planned, the decisions you make have a much greater impact, so it can be difficult to pick and run with one of the courses of action available to you.
Here, we’re going to take a look at the challenge of running a struggling business, and your various options, whether you can power through or outmaneuver your difficulties, or if it’s time to pack up and move on.
Change your perspective
When you feel like you’re on the back foot, it can create the very real sensation that the walls are closing in on you, and it can feel like you’re constantly retreating. A change in your mindset might help you break out of that spiral. Adopting a growth mindset takes some work, but it focuses your energies towards moving forward, staying flexible to changing circumstances, learning from your mistakes, and constantly finding the inspiration to keep working hard to get through it. It’s not going to solve any practical problems, but it can help you stay strong and steadfast against the troubles ahead.
Start tracking finances systematically
The biggest threat to any business that’s struggling is typically their debts. If you are able to start taking care of your debts ahead of time, then it may free up some pressure as you go along. Work out what your debts are and create a systematic approach to paying them off. For instance, some people favour the snowball method, because it helps build momentum and erases some debts entirely, giving you fewer creditors to deal with.
Analyse your business right now
If you want to be able to turn things around, you have to be honest and precise, especially when it comes to identifying the things that aren’t working. To that end, the SWOT analysis method can work very well. This approach sees you identifying the strengths, weaknesses, opportunities, and threats to the business. Sometimes, when you’re overwhelmed with the pressure of keeping things running at the moment, it’s not easy to see the specific problem you need to fix first, and analysis can be very useful for doing just that.
Consider whether you need a strategic change
If your SWOT analysis points out more threats than opportunities and more weaknesses than strengths, the case might be that the business as it stands may not make it. One approach is to seek more funding to give it the support that it may need to become more effective and sustainable, but you might also want to consider pivoting the business entirely, changing your business model, whether that’s the types of products and service you sell or the audience you serve.
Know when it’s time to pull the curtains
Sometimes, there is no feasible way to turn things back, to change course, and to save your business. Often, this happens in the case where your business has approaching debts that it simply has no way to cover. When that happens, you want to start planning your exit instead. Paying your taxes and employees as best as possible, and closing the books before working with an attorney to go through insolvency and potentially bankruptcy the right way might be the appropriate course of action. Letting the debt keep piling up and up, and for the potential penalties to get heavier, still, can end up making the process much more painful.
Plan the comeback
If you’re able to get out of closing a business relatively unscathed, personally, then consider yourself lucky. You do have the opportunity to bounce back, though it’s certainly not guaranteed to be easy. Take the time to show yourself some self-care, work out what went wrong with your business, including the risks you failed to notice, and the plans you failed to complete, and use that knowledge to help you come back stronger next time. Of course, if you have any debt that prevents you from doing that immediately, then take the time to pay it off first.
Which course of action above works best for you and your business is going to depend on the options available to you and the state of your business. You need to give it a serious assessment to work out the right step.