Running a business can be full of ups and downs. Many businesses experience a downward turn in their operations but that doesn’t mean you can’t recover and thrive. This article will look at how to save a struggling business by covering:
- Questions to ask yourself to identify the issues
- Financing options
- Cash flow optimisation
- Finding new clients
Questions to ask yourself to identify the issues
Start by identifying how you got into the situation. These questions can give you a starting point to work from:
Do you have a thorough business plan?
A business plan is like a roadmap: you can start driving without one, but you’ll be more likely to get lost on the way.
A business plan should include detailed information on market analysis, competitor research, audience profiles, marketing goals, logistics and operational plans, cash flow information, and an overall growth strategy. Writing this up will allow you to track your progress toward important milestones and change tactics as you learn more. By having your plan in writing, you are setting yourself up to grow at a faster rate than businesses that don’t create a business plan.
Have you conducted market and audience research?
Market and audience research can help you confirm that your business is sustainable in the current market.
Considering the following questions and use online data to gain a detailed picture of where your business belongs in the sector:
- Who buys your product? And who do you want to sell to?
- What do you offer those people?
- What problems are you solving for them?
- Why would they buy from you over your competitors?
- Who are your competitors?
- Who dominates the industry? How can you improve on what is already out there?
These questions can highlight gaps in the market that your business can occupy and give your company a better chance at survival long-term.
Have you adapted to changes in the market?
Has there been a change in technology, or a shift in the way your customers engage with businesses? For example, many businesses operate digitally now because technology has allowed customers to shop online more. Many retail stores even have their own apps because it’s more convenient for smartphone users. Even during the pandemic, many restaurants who were unable to operate began trading online through delivery services, when they didn’t offer this service before.
These ‘digital’ methods are a reaction to the changes in the market and technology, and if you have ignored a change like this in your industry then this could be one the reasons your business is struggling to continue.
Are you managing your time effectively?
There’s no doubt that small business owners have a lot to manage but if you are spending hours on administrative tasks that you could be spending on customer work and making money, then you could find ways to streamline those admin tasks.
41% of business owners say that accounting was their least favourite role as part of running their business. Using an app like Countingup can automate a lot of your bookkeeping responsibilities, freeing up your time to make more money for the business.
Now we turn to the actions you can take to turn around stalling business performance.
First look at what financing options may benefit your business, each has its pros and cons and will allow you some flexibility and breathing space when it comes to your finances:
- Term loan – you take a lump sum, and pay back in monthly installments. You can also get a start-up loan from the government if you have been trading for less than two years.
- Small business grant – grants are a sum paid to chosen businesses that you don’t have to repay.
- Invoice financing – this can help you top up cash flow. Invoice financiers pay you the total of an unpaid invoice, and you pay it back to them with interest when you receive the customer payment.
- Revolving credit facilities – this acts like an overdraft on a personal account, where you only pay interest once you’ve dipped into the funds.
- Business credit card – like a personal credit card, this could allow you to make strategic purchases on stock or equipment to grow sales, and you can pay it back monthly.
Cash flow optimisation
To keep your business open, first reduce costs. Cut out unnecessary expenses and look at areas where you can reduce costs like travel expenses, your utilities and monthly bills. If you are renting an office space or premises, see if you can work out of your home.
82 percent of small businesses fail because of poor cash flow management. We have several articles that can help you with optimising your cash flow, so first create a cash flow forecast so you have visibility of what’s coming in and going out of your bank account. Examine how you currently manage your cash flow and improve it by sending invoices promptly, following up with unpaid bills, looking at your pricing structure, and seeing if you can turn negative cash flow (more going money out than in) into positive.
Finding new clients
You’ve got your audience research, so find out where those target customers ‘live’ online and offline. Where do they find out about businesses? You want to position your business in those places so that you are seen by the right people. Here are some ideas to draw in new customers:
- Offer vouchers or deals for new or referral clients
- Create a website if you don’t have one already. You can find out how to do so here.
- Use digital marketing techniques like SEO, local SEO, social media, content marketing and email. You can read more about digital marketing methods in this article.
- Attend events in your industry
- Use offline marketing such as flyers, business cards or newspaper and radio ads for local visibility.
Keep your finances in order with Countingup
Countingup is the business current account and accounting software in one app. With instant invoicing and automated bookkeeping features, it saves thousands of UK business owners hours of time-consuming admin and helps them keep on top of their finances.
Find out more here to save yourself unnecessary hours on accounting and financial admin stress so that you can focus on saving your business.