I was speaking to a fellow business owner during the Christmas break and as normally happens when you meet someone in the same predicament as yourself, we ended up talking about our businesses. I spoke of the successes we’d had in 2016 and our aggressive growth plans for 2017. Meanwhile she spoke of a difficult year past and the likelihood of another difficult year ahead. Her business she felt, was going nowhere fast and on further questioning, it was easy to see why and best of all, how to turn the business around. So if you’re in the same predicament, thinking that your business is in for a tough year and feeling like your treading water or worse still, getting swept off downstream – here’s a few ideas to help turn it around.
Know your business
The first thing I did was to ask what the most popular products were and what the most profitable products were. Were they the same? If not, how can you make your profitable products more popular or your popular ones more profitable? By having intimate insight into your clients buying habits and understanding exactly what you make on each product or service you sell, you can get a better idea of what needs to happen to make more money in your business.
Get rid of loss leaders and replace with profit winners
Following on from the above, if you’re offering products that lose the business money or merely break-even, get rid of them. Similarly, if you’re offering products and services that no-one is buying, bin them too. Expand on the products and services which are the most popular and most profitable.
Don’t do freebies
If you’re a service provider (or a software provider), the chances are you regularly get asked to do stuff for free on the promise of future work. DON’T DO IT! Some people run their businesses by going round to service providers and asking for free stuff on the premise of future work that they have no intention of giving. If someone asks you for a freebie, tell them you’d be happy to offer the equivalent value of the freebie in the form of a discount on future invoices after the first month. If they’re really serious about forming a long-term relationship, they’ll be happy to snap that offer up. If they’re not and simply want a free ride, they’ll walk away. Don’t be afraid to say no.
Make a Plan
One of the most amazing aspects of my conversation with this fellow business owner was that her business was 5 years old yet she had never made a (i) business plan or (ii) a yearly sales and marketing plan. The result was that she was still paying herself below minimum wage and continuing her business in the hope that things would turn around.
- THINGS WON’T TURNAROUND UNLESS YOU MAKE THEM
- HOPE IS NOT A STRATEGY
Take a snap shot of your business today. How many clients do you have? What’s the average spend per customer? What’s your client retention rate? How much profit are you making off how many sales? Now ask yourself, what are your targets on these points for the year ahead and how are you going to do it? Put a plan in place, pin it to your wall and follow it. Do you need more marketing, more events, better products, better aftersales, more repeat business? How will you do it?
NO PLAN = NO IMPROVEMENT.
Motivate and reward yourself
Motivation comes in all shapes and sizes. For me its regular exercise and the promise of a new tattoo or a weekend away if I hit a key revenue or profit target. If you work from home, think about investing in a hot desk so that you can get some social interaction with other small business owners. If you sit at your desk all day, think about going for a midday run or doing an exercise session off your iPad. What about new skills? Would a training course help you to make your business better? There’s plenty of free or extremely cheap training available on the internet if you know where to look and websites like Eventbrite will point you in the direction of meetup groups and training seminars. Look to the future, don’t live in the past or even the present. If you hit your aggressive growth targets, how is that going to feel? How are you going to reward yourself? Won’t that feel amazing? Make it happen.
Know when to quit
Some of you might be surprised by this. After all, who likes a quitter? The reality is though, if you’ve done the sums and your business isn’t viable or you’re really not enjoying it – throw in the towel. Don’t keep ploughing your valuable time and money into something which isn’t going anywhere. Seasoned entrepreneurs will tell you that they’ve had businesses which have either not made it out of the starting block, or have cost them dearly and lost them money later down the line.
FAILURE IS NOT FAILURE…
Yes, you read that right. As someone who has had an expensive failure in the past, I’ll be the first to say the £10k I lost on a previous start-up was £10k well spent. The lessons I learnt from that have been invaluable in making a success of businesshands today and if I had to do it all again, I wouldn’t change a thing.
Just to add some colour to my £10k loss – the company failed because I didn’t put a plan in place. I didn’t calculate how much profit I would be making from each customer and how many sales I would need to make for the business to sustain me and fund its own expansion. When I finally did the calculations and realised it was going to be impossible to make a living from it, I closed the business down within 24 hours and walked away. Painful yes, but it would have been far more painful to live in denial and continue for months, maybe even years before finally throwing in the towel.
If you’re a business owner or senior director and need help with your business, we’re here to help. Not only do we offer a comprehensive outsourced marketing department service to get your business seen and heard by the people that count most, but we also offer strategic marketing advice. For more information, call us on 0207 458 4788 or email us at firstname.lastname@example.org.
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