As a business owner, the last thing you want is to see your company go under. But sadly, businesses stop operating every single day. The reasons for that are many, but it’s the truth nonetheless.
According to Entrepreneur, 20% of small businesses fail in the first year. Considering that you’ve just begun your entrepreneurial career, the last thing you want is to find your business in this 20%.
In modern times, competition is everywhere. And you’ll be competing against a lot of other companies. So, in a sense, it is a fight for survival for many entrepreneurs. Here is how to come up on top.
Manage Your Money
Maintaining cash flow will keep you afloat. The moment cash starts to dry, you’re in trouble. When we look at the main reasons as to why businesses fail, lack of money is right up there.
Cash flow problems are the number one reason why you might be finding yourself in this situation. According to this Linked In post, cash flow problems contribute to 82% of business failures. So the first thing to do is to learn how to manage your money.
One example is to switch from a monthly budget planning to a weekly one. This will help you identify how much money you’re making and how to make sure you’re not spending as much. More so, it will give you an idea of why there isn’t any cash going into your business.
If you’re struggling with money, creditors and debtors are the first people that will “pay you” a visit. When that happens, you need to explain the situation and work out a deal to help your business survive.
Focus On Marketing
How would people know that you exist if you’re not getting your name out there? In the business world, making money is everything. The more clients you have, the more profits you’ll make. If you only work with a few clients, then no doubt you’re having cash flow problems.
When fighting for survival, you need to examine why you’re not making as much money as you intended on making. You might have the perfect product, service, business model, etc. But people are still not coming in through the door. Why is that? While there are many reasons for that, one thing to look closely at is your marketing strategy.
As you confident that you’re doing it right? This is the first question to ask. Go over your marketing strategy and see why customers aren’t biting. If you have a marketing team, sit together and have them explain to you the situation.
In many cases, they’re doing a poor job. In that case, hiring marketers and digital marketers of higher quality might be a top priority. You can even outsource your marketing efforts in a bid to try and lower expenses. But regardless of what path you go down, your marketing strategy needs a revamp.
Sometimes, it’s all about cutting costs. You’ve hired too many people and you’ve given them big salaries. Your business is still young and it doesn’t have the reputation of some of the more established players. Struggling is natural and normal. But since you’re in a dog fight, you need to cut back on extra weight to move faster.
When cutting or reducing expenses, there are few things to do. For starters, fire some people. Maybe relocate to a less expensive office and even cut back on office supplies. There are many things to do and you need to do them fast. Maybe even think about digitizing your business for the time being to help reduce expenses.
Start From the Beginning
You’re losing money, and you’re losing fast. Nothing is working, and the solution is nowhere in sight. What are your options for protecting your business?
When the situation is dire and the answer is nowhere in sight, the most viable option is to go under. Start over and think about all the mistakes you’ve made along the way. Entrepreneurship isn’t always about building a million-dollar business on your first try – very few people do that.
In most cases, it might take a few more tries. But the important thing to remember is to avoid making the same mistakes you’ve made on your previous try. This is the only way to learn and to make sure the next you try it, it will be the one that succeeds.