Many times when businesses fail, they go out not with a bang, but a whimper. They die a slow death. Many small business owners feel the overwhelm of shrinking revenues and the enveloping advance of competitors, but still refrain from making any dramatic changes until it is too late to achieve a business turnaround.
Whether you run a small manufacturing company, professional service firm, or a local retail establishment, there are at least 9 business turnaround strategies you can implement to achieve a successful reversal of your business fortunes.
1. Institute regular strategy sessions
The first time you notice your profit margins shrinking and your clients leaving you for your competitors should be a time when you consider reinventing who your company serves, what it does and how it delivers value.
2. Business model innovation
While this may be obvious for manufacturers, even very small local businesses face strategic business risk from large scale movements and trends taking place outside their industry, or among their customers, or within society as a whole. Business model innovation means that you consider changing who you serve, your position in the value chain, your differentiating value proposition, or all three (among other factors).
3. Invest heavily in customer communication
I am always shocked by just how rarely the average small business communicates with its customer base. So many entrepreneurs and CEOs simply assume that the customers “Do not want to hear from us that much”. My retort to that is always, “How do you know?”
One of the most dangerous habits you can pick up as a business owner is that of turning assumptions into facts without investigation or experimentation. I have seen this one habit kill more businesses than any external conditions or competitors.
Your customers hold the most valuable business intelligence money can buy. Aggressively seeking their feedback and opinions should be your first point of attack as soon as you suspect any structural weakness in your business or your business model.
4. Conduct an audit of marketing assets
Many of the supposed weaknesses and expenses of a business just might be marketing assets hidden in plain sight. For example, a list of former customers who have not bought a thing in the last two years could easily be reactivated with a targeted and honest direct mail campaign. Instead, I often see business owners whose attitude to past clients is, “You are dead to me”.