Stop Your Business Failing
Getting through uncertain times in small business seems like a major achievement. How many times have your heard Small Businesses say something like:
“I don’t know how we did it but we got there”.
That’s the typical entrepreneurial approach to business, keep trying something until it works and hope you don’t fail in between.
While it’s understandable and will probably always happen, it doesn’t do much to safe guard you against the many factors that will test you in your small business journey.
And right now we’re dealing with one.
In my previous blog, Your Ultimate Business Survival Guide, I explained that there are four key elements to dealing with a crisis (be it a pandemic or economic) and that applying all four will significantly increase your chance of success.
The four elements are:
- Stopping your business failing
- Executing a strategy to beat your competitors
- Remaining financially viable
- Continue to sell in a downturn
In this blog, I want to explain the first element in more depth.
How to stop your business failing
Putting in place a process to stop your business failing sounds like the elixir to all entrepreneurial problems. The truth is it can be, but you need to leave ego at the door.
The first element in Your Ultimate Business Survival Guide is to do with mindset. If you’re not prepared to drop the facade and be honest with yourself, you will fail.
Let me be clear, your business doesn’t fail because of market forces or a crisis. It fails because of you.
- It’s your mindset towards difficulty that results in failure or success.
- It’s the action you take (or don’t take) that results in failure or success.
- It’s the way you deal with staff and customers that dictate failure of success.
In society we seem to have protected ourselves from failure:
- Kids at school get a gold star for simplifying turning up.
- Students pass university subjects when you should have failed because passing someone is better for the image (and finances) of that university
By the time these students start a business they just expect to succeed, but when that doesn’t happen they blame everything except themselves.
So, instead of blaming the situation for failure, I want you to deep dive into what you could have done (or will do) to avoid becoming a Small Business failure statistic.
What have you ultimately achieved?
This is a really important question and one that often gets overlooked. It has both positive and negative answers. You had the courage to try and the willingness to get out of your comfort zone, so that’s positive but go deeper than this.
When you started out and probably in your business plan, you would have articulated what you wanted to achieve. Start being critical and self analysis whether you’ve hit those markers.
So, have you achieved what you wanted to in business and how have you come to that conclusion?
When you first started, what did you want to accomplish?
Such is the nature of entrepreneurism, it’s entirely reasonable that what you set out to accomplish has changed from day one. This is okay as you’ll be guided by your market as to what you can truly offer them.
Start to reflect on the driving reason behind what it is that you accomplished.
If what you wanted to accomplish was too easy and you did it within a few years, it’s no wonder your business eventually fizzled.
Likewise, if what you wanted to accomplish was too vast, then it makes sense that you never got there.
Are you out of touch with your clients?
When it comes to business failure this is almost always the case. Nobody has ever gone out of business for addressing the actual needs of clients and their market.
But in a crisis a client’s needs change and not being nimble enough to respond, is a recipe for disaster. You can’t expect that your offer is relevant when your market is experiencing hardship.
So, were you just continuing as ‘business as usual’ or did you tailor your offering to suit the change in dynamic?
If you don’t find solutions to the current problems you clients have, you’re in trouble.
Are you in a niche marketplace?
As the Americans say “There’s riches in the niches” but in a crisis there is also a chance that your business is too niched.
If you work with real estate agents and people stop buying and selling properties, the agency won’t have money so naturally, you’ll lose business.
How niche is too niche? And how can you diversify your offer in a crisis to capture new but related business?
You don’t have to completely change your modus operandi but opening up new markets you can work with is a good thing.
Are your products or services unique?
Offering what everybody else does in a crisis is pointless. Customers will just choose the cheapest and you don’t want to be competing in this space.
Finding a unique solution that satisfies customer demand is the greatest way to grow your business during tough times. In fact, it’s what many successful companies have done.
Ask your customers what they really need from you and put in place a tangible offering and, even in a crisis, you’ll win new customers. Knowing your worth and what you can offer your customers is key to growing your business during a crisis.
How do you communicate your value proposition?
Well, you don’t really have a value proposition in a crisis if you haven’t asked your customers what they require. This is the key ingredient to success.
COVID-19 means everything has moved online and companies like House Party, a digital face-to-face social network, have executed their value proposition incredibly well. Chances are you didn’t know them before this crisis and all they really do is what Facebook, Skype and others do – offer video calls to large groups of people.
Getting your messaging right in a crisis makes you a desirable option in the marketplace.
Are your expenses higher than sales?
Naturally, if your expenses are higher than sales you’re in trouble. In a crisis you have to pay closer attention to this and make judgments about where you money is spent.
If you haven’t seen an ROI on expenses, you’re probably spending important money on nothing.
Do you have a pricing issue?
Customers will always be price sensitive until you prove the value in what you’re doing. In a crisis, review all of your pricing and make judgments as to whether you move the pricing needle to accommodate a change in business landscape.
While it’s important to look at your pricing you don’t want to change it too much. I prefer an introductory offer over a pricing downgrade.
Do your products or services add value to the marketplace?
If you don’t you won’t make it.
Always speak with your customers and find out directly from the source what it is they like and dislike about your offer. In a crisis, it’s your honest customers that will help you through and you need to offer them something that adds value to their change in circumstance.
In a crisis, asking yourself these questions is the best way to move forward and survive uncertain times.
Stopping your business failing is the first element of four that form Your Ultimate Business Survival Guide.
In coming blogs, I’ll be explaining the three remaining elements you can apply to ensure you’re prepared and ready to handle, with confidence, the next challenge you face as a small business owner.