After you have read the first part of this article make sure you read the completion here, to get the answers to how to turn a struggling small business around.
6. Organizational issues leading to a struggling business
Is your company suffering from organizational issues? Do you have too many bosses and not enough workers? Or, too many workers but no bosses? Are you the ONLY boss, but only when you are there in person?
If so, then you are not alone. Many small businesses go through this issue. When a company has no clear lines to show who are the supervisors and who are the employees, things can get crazy fast! In this confusion, feelings can get hurt and people will start to leave your company.
There is only ONE captain on a ship!
There must be ONE captain on a ship, always. The co-pilot answers to the captain, and everyone else answers to the co-pilot. When the captain is not on the deck the co-pilot is the acting captain, but still answering to his or her superior, the one, and only REAL captain. So, use your captain’s authority to turn your struggling business around now!
An easy fix
To fix organizational issues, you will need to draw a clear line in the sand as to who is in charge. Once you have put a firm structure in place, call a meeting and let everyone know who calls the shots. Make sure that everyone in your company knows the roles that are assigned. This will help things go much smoother and employees will know who to turn to when they have a problem.
7. Outdated equipment
When was the last time you invested in equipment for your company? If it has been a few years, maybe it is time to think about purchasing some new equipment.
Outdated equipment can often breakdown on you when you need it the most. These failures can be costly in several different ways.
First, you will have the cost of repairs and then you will have to deal with the loss of productivity. Breakdowns can even cause you to lose customers.
Fixing continuing issues with old equipment
The fix to this issue is simple. Take a hard look at the equipment you have on hand and determine which ones need to be replaced. Can an investment in new equipment contribute to turning your struggling business around?
New equipment can help prevent breakdowns and they can do things your old equipment simply couldn’t.
Then consult your CPA before you make the next step of acquiring the equipment. Equipment can be purchased or leased. Your CPA should be your expert guide in deciding on which way to go.
8. Expenses that are too high
One issue that all companies face is high expenses. When your expenses get too high, it can really hurt your profits. If you are spending more money than you are taking in, you have a serious problem on your hands.
Taking control of cash flow
To reduce expenses, you should do an audit of your finances. Look at what you are spending money on and try to come up with ways to reduce your overall costs. But remember that cutting wages is the last thing you want to do. This can have a negative impact on your company, and you may have many workers that will leave. Having to train new employees is expensive and finding good people is hard.
TIP: Personally, I set aside time one day every week for finances. I organize my “finances-time”, dividing my time into 2 parts:
1) Getting everything up to currency: Check and balance the books, pay bills, etc (I personally use QuickBooks)
2) Plan and update my next financial moves: Stay AHEAD of the game and EVERY upcoming expense, know WHEN next payments are due and PLAN to stick to those due dates in anticipation. Estimate upcoming earnings.
9. Your store’s appearance
If your storefront looks terrible on the outside, why would anyone want to shop there? In all fairness to your customer, if your store is screaming “My store looks bad because I am a struggling business that can not afford new stuff”, then you need to improve your business image immediately. Many small companies try to save money by not spending money on appearance. But this alone could end up causing them to go out of business!
This also holds true for websites. If your company website looks like it was made in the ’90s, or if you fail to market your site in terms of high quality, frequently published content, and correct SEO? Then chances are you are not going to have a lot of repeat visitors.
Upgrading the appearance does not have to be expensive
To fix this problem, try to spend just a little bit of money to spruce up your store’s appearance. Have a new sign made or slap a few coats of paint on your building. A little investment can go a long way.
Also, if you run a company website, make sure that it is up-to-date and easy to load and navigate. If you are not sure how to do that, you can always hire a web designer to do it for you.
10. Not focusing on your demographic
Demographics are the people you will be trying to target in order to sell your goods or services. Many small businesses fail to cater to their key demographics and it really hurts their profits.
Find out who your customers are and come up with a marketing plan to reach those people. For example, if your small business sells skateboards, you should probably be targeting people who are under the age of 30.
You should have determined your demographics long before you actually started or bought your business. But if you didn’t it’s never too late. You can use the internet to search for articles on how to determine your demographics. Or, if you bought an existing business the previous owner or a business-broker can provide that for you.
11. Lack of effective advertising
How are you spending your advertising dollars? Are you spending a fortune on TV ads but are not seeing the desired results?
If so, then you have a lack of effective advertising. When you are not reaching your target audience, the chances of making a sell is going to be slim.
How to determine the advertising methods that truly work for your business
You need to know what type of advertising works best for your kind of business, before you become a struggling business from lack of customers.
If you have tried several different types of advertising but have failed to make sells, then you should change what you are doing. Instead of spending a lot of money, why not think outside the box?
For instance, why not print out a bunch of flyers and have your employees hand them out within a one to three-mile radius of your store location? This is a great way to bring in people from the street. Strip mall parking lots are great spots for this.
The street-smart aspect of flyer-distribution that truly works
Technically, you may be required to ask for permission from both the shopping center owner and car owners of the cars on which you place the flyers. You may even run into a pissed-off person for distributing your flyer on the windshield of their car. But this is just an example of how you need to use your street-smarts. You’ve got to have a “thick skin” to be competitive in business!
To be street-smart means you don’t always go by the book. Yet you don’t do anything that will get you into legal trouble either. You are just being slick and sneaky about some of the things you do. If you are willing to take small chances, then you will laugh all the way to the bank.
Also, make sure to use word of mouth advertising; it’s the BEST advertising there is, and it’s FREE! Remember how I said to always talk with customers? That’s a classical method for getting word of mouth advertising flying!
An additional advertising free-bee
Ask some of the best and happiest customers that come into your shop to give you a positive review online. When new people, potential new customers, read those reviews, they will more than likely to spend money at your business.
12. Awareness: Not paying attention to your competition
Do you check out your competition from time to time? If you are not, then you should start now! The road from a successful business to a struggling one can be quick and painful if you don’t keep your eyes wide open for the competition.
Many times, companies will lose business to their competition simply because the competition is offering a small incentive or other gimmicks. Maybe they are offering discounted products or gift cards free to those who spend more than a hundred dollars at their location?
Or, what if your competition suddenly launch an offensive against you by offering the same product or service that you offer, but at a deeply discounted price?
To keep up with the competition, you will have to always keep an eye on them. Find out what they are doing and do it just a little bit better. There is an unlimited number of ways how you solve competitor threats. It’s could be as simple as you offer some freebies to your customers and make sure that what you are handing out is always better than what your competitors are giving away. This can bring in a lot of business for you which is always great for your profits.
Your starting stance for figuring out competitor counter-measures should always be this:
Always be BETTER than your competitor in EVERYTHING, from the cleanliness of your store, your location, your product or service quality, your reliability, and your machinery, as applicable.
Don’t fall into the trap of your competitors’ discount plot. You can safely keep charging more for your products or services, as long as you are better than they are. Capitalize on your quality if their quality is less. You can compare this to buying a cheap ticket on a budget airline with crappy service versus an airline that charges more for the same flight but offering quality assurance and better comfort.
Brain-storm to come up with the best counter-measures to go head on with your competitor. There is a solution to every challenge. This is true even if your competitor may be bigger than you. So don’t ever surrender your piece of the pie. Have the competitive mindset of the street-smart queen or king you are!
13. A Bad location
Is your small business in a bad location? Is there a lot of crime in your area? If it is, then many people might not want to shop at your store. When people do not feel safe, they will go somewhere else for their goods and services.
Traditional business wisdom would advise you to move to a better location. If that’s your immediate solution, then make sure to save up some money or get a business loan so that you can move to a better area. This may help your immediate sales increase and you will not have to worry about theft as much.
14. Failing to utilize the internet
While most companies utilize the internet to bring in more business, some have failed to keep up with the times. Not having your small business online is a huge mistake that you do not want to do. No matter what type of good or service you offer, being online can help you generate sales.
A website is easy to launch, and a very cost-effective way to advertise. Build a stunning website that can showcase your goods and services. You can hire someone to build it or try to do it on your own. Also, you will need to create several social media accounts on different platforms. This will help you not only make sales but also it will allow you to connect with your customer base. It will help build trust and you can start to build your own unique brand.
15. Constant Awareness
As you can see, these are a few of the major problems that small businesses face. If your company is struggling to turn a profit, you can use these tips to turn things around.
Turning a struggling business around does not have to be that hard, as long as you act early and if you know how to do things!
Remember that the only way you are going to be successful is to put some hard work into your company. You need to know about EVERYTHING going on around you. Your situational awareness must be like a non-stop radar, scanning your operations constantly.
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