Five Steps to Turning Around a Struggling Business
Turning around a struggling business is never an easy road -- especially if it's
a business you founded and grew yourself. The blood, sweat and tears that go into
getting a business idea off the ground often makes it hard to separate your emotions
from the business itself. The failure of a business often feels like, and is perceived
by outsiders as, a failure of the person in charge. The truth is that most struggling
ventures can be turned around with a heavy dose of commitment, determination and
work.
An accepted rule in startups is the theory of thirds -- one third of all new businesses
will eventually be profitable, one third will eventually break even, and one third
will fail. Most of the failures and break-evens can be traced to poor business fundamentals
such as problems with accounting, financial planning, marketing, and the like. Very
few fail because the business idea was bad, some fail because the operations are
sloppy, but the overwhelming majority die out for a lack of business fundamentals.
If your business is struggling to survive, follow this five-step process go get your
venture back on track:
1. Get Over It
The first and most important step is to separate your emotions from the problems
at hand. Successful entrepreneurs learn to see the writing on the wall -- no matter
how committed you are to whatever great idea you had, consider the possibility that
it is the factor that is holding you back, and be willing to make whatever changes
are necessary to succeed. In order to identify what's wrong, you must be able to
take an objective, emotionless, business-focused look at every part of your venture.
Avoid assigning blame or feeling bad -- these are emotional responses that keep you
from moving forward.
2. Assess and Evaluate
Most struggling businesses are experiencing more than one fundamental problem. Sloppy
bookkeeping, unmanaged marketing, untrained staff, and a lack of planning are common
issues, and usually one problem leads to, or can be traced to, another. Every aspect
of the business should be reviewed, one factor at a time. Figure out what's working
and what's not, and create a comprehensive list of objectives that will help get
your venture on the road to recovery. Everything should be examined -- from the company's
image to the staff culture, the financial statements to the data-entry processes,
the website analytics to the management of employees. Everything is fair game.
3. Prioritize
Using the list of likely culprits developed above, prioritize the issues from biggest
likely impact on down. Don't over-analyze or agonize over this step -- the point
is just to give you a plan or outline for working through the entire turnaround process.
Don't worry if you aren't sure which is the biggest impact, just rank them the best
you can and move on. It is better to start somewhere than not do anything.
4. Hyperfocus
Starting with only the first issue on the list, develop a strategy for making the
changes you need. If you aren't confident that you know what to do, then your first
objective should be to fill in any gaps in your knowledge. Study the business fundamentals
related to the problem. Become an expert so that you can strategize a workable solution.
Once you have a complete plan in mind, get everyone in your business on board.
Establish a measurable goal to be reached within a set time, no more than 90 days,
and be sure everyone is clear about their role in making the change. Once the first
objective is met, return to the prioritized list and start on the next issue. Focus
on only one problem at a time -- this way, your attention is not pulled in a million
directions and it is easier to stay motivated. Celebrate successes with everyone
who contributed.
5. Repeat
Once the first issue on your list is solved, you can then attack the second issue
on your list. If significant time has passed, you may need to return to step two
and work steps two through four again.
The Bottom Line
Turning around a small business is very similar to developing a new business -- with
a little added stress. Every aspect must be broken down and examined to optimize
efficiency, accuracy, and profitability. Taking the time to work through each issue
can pull your business back from the ledge, and put you back on the road to success.
About the Author
LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into
great companies. The LaunchX System provides step-by-step education in the mindset
and skill set entrepreneurs need to succeed. Our program includes intensive seminar
training, key business software, and specialized workbooks that teach you the fundamental
skills you need to achieve your financial and worklife goals through entrepreneurship.
Register today for our introductory course and see what LaunchX can do for you!
Contents copyright © 2009-2011 by LaunchX LLC. Permission granted to reprint this
article in its entirety provided that the “About the Author” section and all hyperlinks
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