Is your revenue rapidly declining? Do you have less customers than last year? Do you struggle to pay vendors on time? Do you want to avoid business failure?
If so, it’s time to determine why and make a firm commitment to fixing your problems.
You maybe already know that you’ve got only weeks or, at best a few months, before you run out of cash. So what must you do to revitalise your business. We recently wrote an article which outlined 5 red flags to help identify a failing business.
This article will share three practical, yet very powerful, ideas to focus your efforts on.
#1 Reduce Expenses
Sounds obvious, right? But I see so many entrepreneurs bury themselves deeper and deeper by ignoring the number one rule…preserve cash.
I’m not advocating being cheap or cutting expenses to the bare bone. I’m advising that you become more frugal. There’s a difference. When your business is failing you need to conserve as much cash as possible and squeezing every single cent of profit you can.
As the saying goes “cash is king”. Many businesses fail because they run out of cash. It’s often that simple. The product or service is good but there’s no money in the bank.
Be honest with yourself. Which expenses do you really need?
Review your spending habits. Scrutinise every cost when your business is floundering. Ask yourself what expenses you could eliminate, reduce or postpone. Do you have assets that no longer contribute or generate income? Sell them if they don’t generate cash.
This one tip alone would significantly help avoid business failure.
#2 Focus on Selling
Few businesses succeed overnight and even fewer fail overnight. Your business is failing because you’re not leading it properly or aren’t making wise decisions.
You may be like many entrepreneurs who are experiencing similar problems. They focus on their product, service, or invention and all the “fancy stuff” rather than addressing the core problems. They fail to focus on generating income by generating sales.
I have never seen a businesses fail due to having too much revenue. Chances are, that you’re not focusing sufficient time on generating sales. Sales may not be your “thing”.
May be you’d prefer to be the world’s best people-person, dealing with staff and customers. But who is selling your products or services? You need to be a strong sales advocate for your business.
You need to sleep, breath, and live sales every day. You need to constantly ask yourself, how can I sell more? Do you have previous customers whom you can reactivate and sell your products and services to again? How can you sell more to existing customers?
How can you attract new customers?
#3 Learning and Development
Learning should be lifelong and not confined to school or university.
Obtaining more knowledge will give you greater insight and will help you identify solutions to your problems. It’ll give you more opportunities and choices to build on your current skills. You’ll be able to prevent future problems well before they happen. And you’ll be able to resolve problems much sooner, and with less stress. You’ll be the master of your own destiny.
How much time do you spend learning? Do you learn from successful and experienced entrepreneurs? Do you know what best practices exist in your industry? How well do you know your enemy – the competition?
As the old adage goes, “keep your friends close but keep your enemies even closer”. You should study what your competitors are doing. What are their strengths and weaknesses? How can you draw on this knowledge to strengthen your business and outperform them?
Conclusion – Avoid Business Failure
If you’re serious enough to want to avoid business failure, I applaud you. The world needs people like you. Small business entrepreneurs like you employ people, pay taxes and meet customers’ needs.
If you want to expand your knowledge and skills even more, click on the link to join our global community. Each week, we share some useful tips and lessons we’ve learned from being in business. Whether it’s recommending a virtual accounting service, marketing, entrepreneurship, management, or leadership, we’ll share the same tips and information we already share with hundreds of our clients worldwide.
There’s no one method to guarantee business success. But, by conserving cash, focusing on sales, and developing new skills, you’ll be better prepared to avoid business failure.