We’ve all been caught in a business rut, but what is the difference between a sluggish business and a business that’s tanking?
If you suspect your business is failing, you need to move swiftly in order to salvage key clients and accounts (not to mention your finances).
Follow this simple 7-step plan to assess the damage, understand your mistakes, and take targeted action to keep your business afloat.
- Get clarity
You may feel like your business is failing, but are you certain that’s the case?
Collect hard evidence and get clarity on the ‘state of the union’ as it relates to your business.
Consider things like..
- How long this slump has lasted
- Whether or not your failing business is seasonal or caused by larger economic trends
- Exactly how your revenue and income have changed
- Projections for the future
Only when you’re crystal clear on how your business is failing can you begin to determine why it’s failing and what to do about it.
- Get a second opinion
Consult your coach, a mastermind group, or a trusted business associate with your concerns. Find out if they think your business is failing too, or if you’re being paranoid. Ask them for ideas on how to shift the tides and pull yourself out of the proverbial hole.
- Pinpoint mistakes
Take a good, hard look at what you have done to contribute to your current situation. Be objective. Don’t be too hard on yourself, but don’t blame the marketplace (or the weather) for things that are well within your control.
You might consider…
- How you spend your time – have you been working too much or too little? Have you been spending too much time on mundane tasks that should’ve been outsourced?
- The client experience – are your current customers and clients happy with your services? Do they refer their friends to you? Have they stuck with you long-term or are you constantly working to find new clients? Client sentiment and behavior may hold the key to why your business is failing.
- Price points – Are you way above or way below market rates for your services? If you charge more than average, are you confident you’re providing above average services? If you’re charging too little, are you able to make up for it with an increased customer base or by selling more products?
- Make an action plan
Once you know why your business is failing, you can address the areas that need to be changed.
Take a look at what you learned by completing Step #3. Brainstorm at least 3 different ways you could problem-solve each of the areas of your business that aren’t working.
Let’s say you discover you’ve been grossly undercharging your clients, and that’s why your business is failing. You’ve been running yourself ragged but can barely make ends meet because the cost of your services is so low.
What are 3 different ways to solve this problem?
- Raise your rates.
- Keep rates the same and partner with another coach/trainer to increase your client load and revenue.
- Outsource a portion of your clients to other coaches and take a commission.
Be sure to give yourself options and don’t be afraid to list “crazy” ideas, even if you’re not quite sure how they would work in reality.
- Repeat Step #2
Armed with your action plan, consult the same coach or mastermind group you worked with in Step #2 and ask them which of your ideas is best. You might even create a survey to find out which action steps will be the most effective.
Be open to others’ opinions here. If your business is failing, chances are it’s because you made a wrong move somewhere. Ask for the opinions of people you trust and be willing to implement action steps based on those opinions – even if they go against your gut instinct.
- Implement actions and measure results
Let’s say you’ve found 3 key areas of your business that need to be changed. Don’t feel pressured to revamp everything at once. Instead, make small, measurable changes by implementing the action steps decided on in Step #5.
If you change too much too quickly, it will be impossible to measure your results and see if and how your changes made a difference.
For instance, if you decide that raising your prices is necessary, begin by raising your prices with one client, then, 5, then 10. Measure client responses as you go, tweaking your methods based on what works (the client stays with you and pays more), and what doesn’t (the client refuses to pay what you’re asking).
Once you see a pattern emerging, apply what you’ve learned to your entire client roster.
- Know when to call it quits
If your business is failing and there is nothing you can do to stop it, the best thing you can do is let go.
While many endeavors can be turned around just by tweaking your business plan and marketing efforts, sometimes it’s more cost-effective to stop what you’re doing and start a new business altogether.
While you may be passionate about what you do, you also need to create a sustainable, profitable business that makes you happy and makes you money.
If your business is failing, complete steps 1 through 6, taking care to consult others frequently and measure results. If after making and applying strategic changes to the way you do business, you’re still stuck in a rut, don’t be afraid to shift your focus and try something new.
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