At some point all businesses will hit problems but smaller businesses will suffer more from them which is why looking at the simple points below is a must
1. Acknowledge that your business is in difficulty
This is particularly difficult for smaller businesses that wont have professional advisors and are working 24/7 to keep it afloat. Unless you acknowledge that you need help, you wont try to get it.
Help needn’t be expensive but will produce the big benefit of giving an independent view
2. Identify the problems
Find out what the problem is rather than what you think it is
you also need to see how big the problems are and if they are long or short term.
For short term issues, will the business naturally get through them leaving you time and effort to concentrate on the more problematic issues ?
Longer term problems may need more resources and may be more dependent on issues outside the business.
A big problem may need a whole rethink on what the business does and how it does it and may involve the business going in a new direction.
3. Create a plan
To create a plan you need to also consider the issues of delivering a solution to the problems you have
This may need additional funding that you may not have access to or where lenders may want a stake in the business or some form of security.
Is it worth it to you to do that for long term success ?
It could involve buying or merging with another business to reduce costs and increase customer base to push out some competitors.
One of the benefits of a written plan is that you can see key points to aim for in the recovery and you can measure your progress
4. Cash is king
Manage your cashflow as you cant survive without cash to pay wages, suppliers etc so as part of your business plan, include a cashflow forecast
Be realistic on when customers will pay and when suppliers will want paying as well as reviewing all of your costs to see if savings can be made
This will include selling unused assets but may also involve buying new assets that will improve efficiency and generate cash
5. You need customers
Speak to them to see that you are giving them what they need.
Once you know that, consider are you still able to deliver what they want at a price they are willing to pay and where you make enough to survive.
This may need resources that need to be included in your business plan to develop new products or redevelop old ones
6. Bring along your employees
These are the people who work for you and will help you achieve your goals.
They are also the ones who have day to day contact with all areas of the business
You may have been walking the shop floor every day when you started but as your business grew, you may have lost contact with some areas.
This is where your employees can help you spot issues and will give ways to make improvement but they can only do that if you listen to them and they know what you want to achieve.
If you need to make staff cuts, by them knowing the issues, it may produce volunteers for redundancy or shorter hours etc that may help the business survive.
At Harrisons Business Rescue, we can help you review your business to identify issues and then work with you to deliver solutions that work for you
The first meeting is free so please contact us HERE