Businesses fail because of any number of reasons, but the biggest cause of business failure is due to the owner spending too much time in the business and not enough time spent working on the business.
So if you feel like this because your business isn’t working, the bills are piling up and you feel like pulling your hair out.
Then it is time to stand back and have a good overall look at your business and ask the following questions;
1. Why isn’t my business working?
2. What in my business isn’t working?”
Three key areas which you need to improve in your business are as follows;
1. Reduce Expenses – Are you paying too much for you products and services? Can you renegotiate your expenses and contracts?
2. Improve Cash Flow – How can you increase the money coming into your accounts and reduce the money going out.
3. Increase Sales – This may sound hard, but by changing your marketing strategy, you can find customers who you didn’t know were there.
1. Reduce Expenses
Because payroll is usually a business’s biggest expense, the first thing that most owners think about is to start reducing staff. This isn’t always the case and in most circumstances it is one of the worst things to do. How can you increase sales if you don’t have the staff to handle this?
Here are some simple strategies which I have used before to combat this.
2. Improve Cash Flow
Most businesses in this situation look at their books and can’t understand why if their sales are good, they haven’t got any cash in the bank to pay their bills.
The biggest problem is that businesses have a habit of offering accounts with long payment terms and although they have sales coming in, the money doesn’t come in to the business’s account until 14, 30, 60, etc… days after the product or service has been supplied. On top of this the business has to pay for these supplies or services up front.
This can create a huge difference in the cash flow of the business and if the accounts aren’t chased up and handled correctly, large increases in sales can actually cause problems with the cash flow of a business.
Here are some simple strategies which I have used before to combat this.
3. Increase Sales
This may sound hard, but the truth is that with the right strategy, every business can improve their sales. Increased sales are just a matter of thinking outside the box and overcoming negative mind sets. Please find some useful articles about increasing sales and improving growth in a business.
If you want a very easy strategy which I have used time and again and have managed to set up and grow numerous companies please check out this article.
Here are some problems with mindset and negative thinking which limit sales
There are many negative mind sets which people use in business, half the time they don’t realise that they are doing this until it is too late. I have given 3 examples below with explanations of why they are bad and how they can be overcome.
1. All their eggs in 1 basket – Some issues which limit a business is that they rely too heavily on 1 customer to supply all of their work. This is a bad idea, because you need to ask the question “would your business survive if they went bankrupt tomorrow?”. This is not uncommon, especially if they are your biggest client and give you more work than you can handle.
You need to branch out more and gain more clients so that if 1 client stops using your company, then this isn’t catastrophic to your company.
2. I don’t want to grow – Growth is a scary thing to think of for most people, it not only means more work, but less time, more employees, staffing issues, etc… The biggest reality in business is that if you don’t grow, your business will eventually die a small death.
You might ask why, but the reality is that no matter how good your business is, eventually you will lose some of your clients. This can either be due to competitors, retirement, clients going bankrupt, or simply that they no longer need your services. If you are too good, you will naturally grow through word of mouth.
It takes a very special person to be able to maintain a balance between growth and lose who can keep a business at the same level all of the time and if this is the case, then there is no growth in the business and you might lead to lose of key staff because they can’t grow either.
Embrace growth and if you’re not sure of what to do, seek advice from professionals in the field to help you structure everything right and to reduce the risks and heart each of doing it wrong first time.
3. I don’t want to work too hard or employ staff– This comes back to growth, they want to maintain the same work load and have to employ contractors, employees, etc… but with the right strategy, employees can help you work less and smarter, so that you can have a lifestyle and work on improving and managing growth.
There are many excuses and negative mind sets, but when reality sets in, you need a good strategy for improving sales. To do this you need to have a good hard look at who your clients are, what they want and why they chose you. Then you will understand your industry better and how to market and sell to them better.
Embrace change and if you’re not sure of what to do, seek advice from professionals in the field to help you structure everything right and to reduce the risks and heart each of doing it wrong first time.
Every business can become successful and grow, it is all a matter of working towards a goal of working on your business, this help you to move with the times and make changes as they are required. If you can do this in your business then you are heading in the right direction.
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