7 Powerful Turnaround Strategies To Revive A Dying Business
Sad as it may sound, the health of a business is not guaranteed forever. Virtually all entrepreneurs will face the daunting task of managing the recovery of a dying business. Every business during the course of its existence will experience a near death experience.
This is a period characterized by harsh business conditions; low sales, low morale, low cash, low market share, and low innovation. Some recover from this and bounce back stronger than before, and some don’t.
There are many factors responsible for this near death experience; those that are self inflicted like; a major project failure, incompetent management or poor financial control are generally termed internal forces.
While those that are not self inflicted like; government intervention, economic recessions, the presence of low-cost competitors, or natural disasters are termed external forces.
The continuous survival and success of a business greatly depends on managing these forces internally and externally. Neglecting them can spell doom for any business regardless of size
How To Revive A Dying Business
If you find yourself struggling with a failing or dying business, here are 7 turnaround strategies to help you resurrect your business.
Re-Evaluate: Situation
To treat an ailment, we need to diagnose the patient. The first place to start if your business is dying or failing is to look within the company. This is known as self-evaluation or self-assessment. You have to know what the situation is and what the problem is. When you already know the circumstances, you can now take appropriate actions. When looking within, focus on the following key areas;
Strategy
Does the business have a direction? Does the business know why it exists? What problems it solves and for whom? Is the business focused on the right things?
People
Are the right people running the company? Are the right people in the right places? Are employees committed to organizational success? Are employees properly incentivized to share in the ongoing success of the firm? Are commission plans driving sales persons to focus on gross revenues or gross profits? Are difficult policies, internal strife or the behaviors of specific individuals driving down the collective spirit of the organization? Are there bad eggs in your company that are contaminating the whole organization?
Customers
Are customers satisfied? Do they know, like and trust your brand? Is the business focused on profitable customers versus unprofitable and difficult clients? Are you targeting the right customers?
Product
Are you offering innovative products/services? Can the business better utilize technology to create better products, reduce costs and improve competitive advantages?
Process
Are systems in place to get work done efficiently? Are things being done in the right way? Are policies facilitating work or hindering them? Is the business structured for high performance?
Finance
Are you competitive and profitable? Are cash flows sufficient to sustain ongoing commitments and operations? Is this business largely indebted?
Re-evaluation is the most critical turnaround strategy; without it all other things are just frantic moves that will yield little results. Before you begin to act, know why, what and how affected your business is. Only through re-evaluation can discover all these.
Re-Define: Strategy
After re-evaluation comes re-definition. Re-evaluation reveals what’s wrong with your business and re-definition is putting the business back on track. This is where you go back to the drawing board to set the overall direction for the company. This is where you create the turnaround game-plan.
Failing in business is often as a result of not having a clear direction or having derailed from the set path. So you need to revisit the foundation of your business by touching the following key areas;
Purpose:
“Why do we exist as a business?”
“What need or needs are being met by this business?”
Vision:
“What do we want to achieve using this business as a tool?”
“How far do we want to go in pursuit of our purpose as a business?”
Mission:
“How do we intend to succeed in this business?”
“How and what must we primarily focus on as a business to be the No.1 choice of our target customers?”
Values:
“What principles, standards and tenets must we hold to be true and never compromise as a business?”
“How must we collectively think and behave as a business in order to fulfill our purpose, achieve our vision and execute our mission?”
Brand:
“Who are we as a business to the general public?”
“What is our promise to those we intend to serve?”
“How do we want to be perceived by our target customers?”
“What do we want to be remembered, recognized or respected for in the marketplace?”
- Re-Employ: People
Hardly can you turnaround a dying business without talking about the people behind it. A business cannot function by itself, people make it function. People make or break your business. This is why you need to re-employ. To resurrect a dying business, get the right people on board and get the wrong people off.
- Re-Innovate: Product
Lack of innovation is one of the warning signs of a dying business. It is impossible for a business to remain relevant in the market if it fails to introduce new products/services. People change, market change, technology change and so must your business. If you refuse to change, by constantly innovating your products/services, you are doomed. To bring your dying business back to life, do something new!
- Re-Brand: Marketing
One of the consequences of a dying business is the negative impact it has on the brand. Your customers begin to lose trust in the brand as their satisfaction level declines. Negative word of mouth marketing starts to spread and the brand is no longer known, liked or trusted in the market. To correct this negative association with the brand, you have to kill the old brand and create a new one!
This doesn’t necessarily require a total change in the brand name; only do this as a last resort. What rebranding means is to give your business a new meaning, a face-lift and a new brand identity. This is why in almost every turnaround situation; the company comes up with new marketing campaigns, new logos, new brand colors, and new slogans to let the market know that things are not the same as before.
Re-Finance: Money
As much as I would like to tell you that you don’t need money to resurrect your dying business, we both know that would only be a lie. One of the most obvious signs of a dying business is lack of money. You are almost out of business because you are running out of cash. So to get your business back to life, you need to pay close attention to finance.
The easiest option would be to seek external funding, but this can be a very daunting task especially if the money in question is much. So what do you do? Start sourcing for funds from within the business by doing the following;
Take from your personal savings.
Sell off some of your fixed assets to raise immediate cash.
Cut costs by reducing your operational expenses. Look for every unnecessary expenses and cut them off. Lay off every redundant staff. Stop every extra incentive or benefits for a while.
Don’t try to solve all your financial needs at once; it will only further put you in more financial mess. Break down your business financial needs into sizeable chunks tied to specific needs and begin to fill them with the excess funds gathered.
Seek for strategic alliance from your partners like your suppliers, they can offer you trade credits.
Only after you have exhausted these internal funding options should you seek external sources like; borrowing from family and friends, angel investors, bank loans, factoring, hire purchase, equipment leasing etc.
- Re-Work: Execution
After all is said and done, there is no way to bring your dying business back to life by mere words; you need to do the work. And not just as you have always done before, you need to re-work the way you used to work. You’ve probably been engaged in random work rather than focusing on performance-driven work or goal-oriented work.
It is one thing to work and it is another to align your work with the strategic goals of the organization. Only by doing so can the business be saved from dying. Every work must be broken down into processes, must have a owner and must have a goal or key indicators to track performance.
