As a small-business owner, it’s hard not to take business failure personally. But don’t let plummeting financials do the same to your mindset. Contrary to how you may feel right now, it’s not too late.
There’s a reason the acronym for America’s Best Companies1 is ABC. The key to recovery rests in the alphabet’s first three letters.
Success is not just about being in the black; it’s about thinking in the bright. Big ideas and a positive attitude are vital to help your business survive impending closure.
Neil Anderson, president of The Courage Group, told Jessica Dickler of CNNMoney2 that business owners need to commit to a “failure is not an option” way of thinking.
Obtaining money for your small business may begin with a sound business plan, but it ends with investors’ confidence in your energy and motivation for owning and operating a company.
Embracing risk is one of the hard realities that come with owning a small business. Seven out of 10 new firms survive the first two years, but only half of them survive for five years and just one-third survive for 10 years or more, according to the U.S. Small Business Administration.3
Confidence and the willingness to risk it all are crucial to successful crisis management.
The same do-or-die drive that motivated your startup is what will ensure that your company staves off a total shutdown.
Back to the Basics
It’s easy to get bogged down in the complexities of daily operations, accounting, and the prospect (horror!) of bankruptcy. It helps to go back to the basics. A small business in trouble must decrease its expenses and increase its revenues.
Start with revising or rewriting your business plan. A business plan helps an entrepreneur map out her company’s strengths, weaknesses, plans for the future, and timetable for getting there.
Also, a revised business plan will give you an idea of your company’s financial standing, and it will help you refocus on the basics of running a small firm.
For example, identify your fixed costs. Can you let any of them go? Next, identify the variable costs. For service-oriented or labor-intensive products, make a plan to improve the efficiency of your company’s operations and employees.
Overwhelmed? Take a break and head to the library. Spend an hour rereading your old business textbooks. Sometimes the best solution is the simplest one. It may even be right in front of you.
Ultimately, in addition to the right attitude, a strong balance sheet is the solution to your struggling finances.
Everybody’s heard the adage, “It isn’t personal; it’s business.” This isn’t your failure; this is a failure of your company to compete. So, take an objective eye to study the competition.
Research should begin with data collection.
“Join professional groups, attend trade shows, and subscribe to industry publications. Such organizations often publish surveys and trend reports that will give you insights on what others in your field are doing,” Karen E. Klein wrote in the Los Angeles Times article, “Small-Business Advice: How to Study Competitors.”4
Klein also wrote that national lobbying organizations give members a heads-up about pending or passing legislation that would affect business owners.
After you obtain the data, analyze the numbers. In which areas are your competitors spending money? Where are their highest margins? Never underestimate the power of basic, unbiased information.
Feedback from your customers may also help identify deficiencies in your small business. In the end, satisfying your customers is a fundamental part of business ownership.
If you’ve done your best to satisfy customers and implement the ABCs but you haven’t seen a positive change in company performance, consider seeking third-party professional assistance. Even the most accomplished entrepreneurs can’t do everything perfectly, all the time.
For more information, visit:
1. “America’s Best Companies”
2. “Six Ways to Keep Your Business Alive”
3. “U.S. Small Business Administration: Frequently Asked Questions”
4. “Small-Business Advice: How to Study Competitors”