Business failure is one of those things every businessman must anticipate while entering into whatever area he/she has chosen to do his trade. Life is not characterized by 100% success all the time; there are always times of decline, growth and bountiful harvest.
So when you begin to notice signs of failure, you should be ready to spring into action to prevent the worst from happening to the investment you have made over the years.
What are those signs to look out for?
- No more profits: If your business which has been declaring profits suddenly begins to go for months without profits, it is a sign that it is about to fail and that something urgent needs to be done to save it from total collapse.
- Reduction in turn over: When the goods in your store are no longer easily sold and replaced, it is a sign that failure is creeping in.
- Inability to maintain staff: Your inability to keep maintaining the same size of staff and equipment also is a pointer to the fact your business is failing.
- More credits: Are you taking more credits or loans from the banks or other financial institutions to fund your business? Then you should be aware that it is beginning to fail and should you keep obtaining loans to run it, it would liquidate in no distant time.
- Great losses: Even if you are not making profits, you must not run into losses. If you begin to notice that you are declaring losses, it is also an omen that something worse is about to happen.
However, when you notice the afore-mentioned symptoms, there are things you can still do to save the declining fortunes of your business and prevent it from total failure. If you act fast and correctly too, the tendency is that the errors responsible for the declining fortunes could be corrected and the glory of the business restored.
You must not fold your hands and watch everything disappear into the drains. You must take proactive measures to salvage the whole situation and turn things around. When your intervention mechanism works out fine, everyone including your employees would be happy again.
So what do you do?
- Change your approach: Your failure could be a direct result of the approach you are using to run your business. You must ask yourself these questions: how have I been treating my customers? What is my relationship with my employees? What is the price of my product? What is the quality of my product? What am I doing differently from those who are succeeding? After thorough scrutiny, you should be able to diagnose what you are doing differently from those who are succeeding and then change your approach.
- Reduce staff: If you can no longer maintain full staff strength, the rational thing to do is to either reduce the number of your employees or retain them and make them work lesser hours. When their hours and the allowances are reduced, it helps to save the cost of running your business. You also need to challenge them to put in their best and have their full benefits restored as soon as things normalize. This would make everyone strive to do his/her best.
However, if you must reduce staff strength, you should be sure you are going to retain the very best hands you have, who are able to use their skill and commitment to pull your business back on its feet again.
- Improve relationships: Your relationship with customers has to improve in order to keep them coming back again. You also need to consciously work on the relationship between you and your employees to make them have more faith in you. When they have faith in you they would be willing to do their best for you.
- Re-brand: Sometimes people just get tired of your product either because it has been there for too long and they want a change, or because new products are around that are better packaged. So think of repackaging your product to make it more appealing or add new brands with different tastes.
- Publicize: Create more awareness about your product and whatever changes you have effected to drive more customers to check them out and patronize them.
Having implemented the above suggestions, the next thing to do is to watch the changes bring a new lease of life to your business; and put machinery in place to maintain the new height it has attained.