It is a worrying time when your business begins to fail. There can be panic throughout the company when there are signs that the ship is sinking but this needs to be a time where everyone comes together to find ways to turn around the fortunes of the company. How you do this will depend on the reasons that the business is failing but there are a few steps to take which could help you to avoid this happening. During this time, you need to be a good leader and instil confidence in those attached to the business as well as be willing to take action. Here are a few key steps to take.
1. eCommerce Health Check
First, it is a good idea to get an eCommerce health check carried out – such as an SAP Hybris Health Check. This will assess key areas and identify where the issue is so that you can find ways to change your fortunes. By optimising your eCommerce site, it will, in turn, boost your business’ success.
2. Positive Variable Contribution
One of the most common reasons that business begins to sink is because it costs the business more to provide a product or service than the price that you receive. This means that you need to carefully analyse every individual product/service and find ways to make sure that it is a positive variable contribution, such as raising prices, performing an extra hour of the service or reducing costs (more on this below).
3. Reduce Costs
You cannot control sales, but business costs is one area which is on your control. Finding ways to reduce costs can improve your bottom line and help to steady the ship during tough financial times. There are many different ways that you can reduce costs but just make sure that it does not have a negative impact on the company. A few effective strategies include:
— Outsourcing work
— Remote working
— Switching suppliers, like for broadband
— Using energy-efficient appliances
— Using open-source software
4. Meet With Key Personnel
It can be tempting to run and hide from investors, the board of directors and any other key personnel when the going gets tough, but it is important to be a leader and to be honest. They may be able to provide advice and you might find that they can alleviate some of the financial concerns for you, such as a creditor adjusting the repayment plan so that you are paying less each month for longer or pausing payments until fortunes have changed.
5. Learn From Mistakes & Be Willing To Change
You will see many entrepreneurs make the same mistakes time and time again, which will run any company into the ground. While it is good to be confident and strong in your approach, the best entrepreneurs will also be flexible and always learn from their mistakes and be willing to make key changes.
These steps should help you to avoid a sinking ship and get the business back on track. It is a daunting and stressful time when a business starts to fail, but a great entrepreneur will not panic and work quickly to turn the company around.