Have you been in business for years and are still struggling to keep your business afloat? Now you’re wondering how to save your failing business.
Generally, there are several challenging aspects of running a business.
Some of these include making sales, building an online presence, cash flow management, marketing, customer retention, etc.
These challenges can lead to business success or failure, depending on how you handle them.
Perhaps you’ve been mismanaging your business, and now it’s about to hit rock bottom.
Do not fret.
There’s still hope for you.
There are certain fundamental principles of business success you can start applying moving forward to save your failing business.
Stay with us as we explore these principles together, but first, let’s see why businesses fail.
The 6 Top Reasons Why 75% Of Businesses Fail
Research reveals that only 25% of new businesses make it past the first 10-15 years and above in business, with the healthcare industry having the highest success rate.
Others fail after two years, others after five years, and some never make it past the launching stage.
Here are some reasons why the majority of businesses fail.
Inadequate Capital Or Funding
This is one of the major financial pitfalls that lead to business failure.
Some business owners focus only on the amount they need to start the business and neglect how much they need to keep it running.
They neglect to adequately plan for operation costs, overhead expenses, marketing costs, and other certain unforeseen expenses.
As such, they cannot keep up with all these financial obligations in the business.
Consequently, causing them to struggle to keep the business afloat and even shut down the business in worst-case scenarios.
Lack Of Proper Business Planning
Many business owners understand that they need a business plan when starting a business.
However, not all are careful enough to ensure that their business plan is fail-proof and covers all essential aspects of the business.
Specifically, they fail to create a business plan that;
- Defines the products/services they intend to offer, their target market, and the competition.
- Points out the competitive advantage they’re bringing to the marketplace.
- Gives room to adapt to trends in niche/industry.
- Transcends beyond the first few years in business.
Overall, most business owners end up with failing businesses due to ineffective business planning.
Marketing is a crucial aspect of every business.
If done rightly, it can lead to a profitable business venture.
Sadly, some business owners get it wrong.
They make the mistake of not properly identifying and understanding their target market.
Also, they tend to make too little budget for marketing or ignore the competition.
As a result, they end up struggling to stay afloat in business.
Poor Management Of Human Resources
Poor management of human resources is another reason why businesses fail.
Some business owners don’t know how to harness employees’ strengths/talents for the business benefits.
This leads to inefficiency and productivity in business.
Sooner than later, the business shuts down due to the inability to generate sufficient funds to keep up with operation costs.
Poor Cash Flow Management
Poor cash flow management is when a business expenditure exceeds its revenue or income.
This is mostly due to poor financial planning.
The result of this is that the business begins to lack sufficient capital to keep up with operations costs.
As a result, causing the business to fail.
Scaling Too Soon
Also, most business owners make the mistake of expanding too soon.
Just when they start recording massive profits in the business, they go all out to start making major changes to the business without checking to see if the business can afford it at that time.
In the end, they start struggling in the business and fail at the end.
Chances are you’ve made some of these mistakes in your business.
That is why you’re at this point where your business is almost failing.
Fortunately for you, you can still turn things around and save your failing business if only you can implement these agelong principles of business success.
What are they?
Let’s find out in the next section below.
How To Save A Failing Business – Recommended Steps To Implement
One of the major characteristics of successful entrepreneurs is their courage to face challenging situations.
This is why they’re able to stand troubling times in their business.
As you ponder on the thoughts of how to save your failing business, know that you’re not the first business owner to be in this situation, nor will you be the last.
Stories abound of successful entrepreneurs who almost failed or failed in business.
Yet, they overcame the ugly circumstance around them and achieved success.
Drawing from the experiences of these successful entrepreneurs and other age-long business success principles/practices, here are the exact steps you need to take to save your failing business.
1. Make A Mindset Shift
Every major positive turnaround begins with a mindset shift.
This is why the first step in saving your failing business and turning things around begins with a mindset change.
This mindset change will help you approach every step you take with a sense of positivity and hope.
So, rather than see yourself as a failure and not being good at anything, see yourself as an entrepreneur in learning.
Think of yourself as an entrepreneur in learning who makes mistakes, learns from them, and becomes better.
Likewise, see the current challenges in your business as a temporary setback on your entrepreneurial journey.
Above all, keep an open mind as you navigate these rough times in business.
With these mindset changes, you should be ready to courageously take the next steps.
2. Identify Where You Got It All Wrong- Ways To Save A Failing Business
Now that you’re in the right frame of mind, you need to take a step back and analyze your business to figure out your errors.
You can’t fix a problem if you don’t know where the problem is coming from.
This is why this next step is crucial in saving your failing business.
So, you need to identify what wrong steps you took in the past that have led to the current situation in your business.
You can start by asking questions.
Ask your customers questions about your products/services and get feedback.
Also, ask your team about your work policies/management activities.
Investigate certain business decisions you made and the aftermath of those decisions.
Even more, re-do a SWOT analysis of your business to identify its current strengths, weaknesses, opportunities, and threats.
Above all, after this step, you should be clear on what you should avoid doing in your business to avoid failing moving forward.
3. Analyze Your Business Finances
After identifying what missteps you took that have resulted in your almost failing business, you need to also reanalyze your current business finances if you want to save it.
So, at this stage, you’ll want to analyze your business’s financial status to track issues like debts, poor cash flow management, irregular business expenses, losses, etc.
This will help you spot financial loopholes in your business.
Consequently, helping you decide on the next steps to take to save your failing business.
4. Cut Down Business Expenses To Save Your Failing Business
Perhaps, you’ve identified a financial strain as one of the major reasons for your failing business.
The best course of action will be to cut down on some extra expenses that the business can do without.
For instance, you could lay off some extra office staff.
Alternatively, you could transition to remote work or opt to use freelancers.
This will help reduce your business operating costs and help you save up money that could be useful in other aspects of the business.
5. Get The Financial Help You Need
Money is one of the live wires of every business, big or small.
You need money for production, to pay for office supplies, run marketing, to take care of other business expenses, and keep it running.
Most especially, at this stage where your business is almost failing, it needs to be up and running if you want to save it.
This is why you should consider getting financial help if you find that you lack sufficient capital to keep the business running after your financial analysis.
You could get loans from families, friends, partners, or investors.
Similarly, you can also use banks and other financial institutions.
However, only take loans from financial institutions that offer flexible payment options.
Also, ensure you use the loan judiciously to generate more profits/revenues for your business.
This is so that you don’t run into more debts in an attempt to save your failing business.
Overall, the right financial help will give you that extra boost to revive your dying business.
6. Restrategize And Rebrand Your Business
This is another magic wand that can save a failing business.
Some of the issues with dying businesses include;
- Unrealistic goals
- Wrong product for the right market and vice versa
- Poor/Unappealing brand image
- Wrong business model
- Dwelling on outdated practices/business strategies, among other things.
If you’ve identified any of these issues in your dying business, your business needs remodeling.
What you need to do is to go back to the drawing board and make changes where necessary.
For instance, you could tweak your branding strategies to be more in tune with what your target market will appreciate.
Sometimes the magic you need to save your dying business is to give them a brand image that portrays freshness and uniqueness- something they’ve never seen before.
7. Improve On Your Marketing
Effective marketing strategies will inevitably lead to increased sales in the business, continuous inflow of customers, and increased customer retention.
A failing business will lack all these, and saving it will require you to improve your marketing activities.
First, you need to identify what marketing mistakes you’ve been making in the past.
Some of the common marketing mistakes that most business owners make include;
- Targeting a generic market.
- Not having a clear and specific marketing message.
- Not having a marketing plan.
- Poor marketing budget.
- Trying to do it themselves instead of hiring professionals, etc.
Once you’ve identified what you’ve been doing wrong, the next step is to make the necessary changes.
This way, you’ll improve your marketing and get a chance to save your failing business.
8. Improve Efficiency In Your Business
As we’ve stated earlier, one of the causes of failure in business is poor human and capital resources management.
Staying on top of your business affairs will mean being able to manage both adequately.
So, to save your dying business, you should ensure that your team/staff’s potential is adequately utilized.
This could mean identifying everyone’s strengths and matching them up with tasks that fit their strengths.
It could mean training your team to improve their skills and make them the best at what they do.
More so, it could mean everyone understands the business goals and works actively to achieve them.
You should also make sure that the business finances are not spent unnecessarily.
This way, you can increase efficiency and productivity in your business moving forward, helping you save your dying business.
9. Keep Up With Trends In Your Industry
Every business industry changes with time.
Failure to keep up with these trends could make your products and services outdated, making you lose customers and leading to a failing business.
So, to turn things around in your business, you should consider taking note of recent trends in your industry and updating your business accordingly.
This will help you offer better products/services to your customers and improve sales in your business.
10. Improve Yourself
Just as you try to improve your team, you should also work on becoming a better business owner or entrepreneur.
As a business owner, you’re prone to make mistakes.
Plus, you’re not expected to know it all.
Thankfully, there’s always room to improve and evolve as your business grows.
So, let go of the past mistakes that have led you to this point where your business is about to fail.
If you need to take on entrepreneurial/managerial training, do so.
Similarly, learn a few business/technical skills if you have to.
This will help you improve and become efficient at what you do.
Thus, helping you get back on track and save your failing business.
11. Don’t Give Up
Struggling with a failing business could really be demoralizing and frustrating.
As you make efforts to revive your dying business, gain some consolation on the fact that you’re not alone.
Other business owners have been in this position you’re in right now and overcame it only because they didn’t give up.
So, keep this in mind, stay strong, and implement the proper steps to save your failing business.
Wrapping Up On How To Save A Failing Business
Now you know what makes a larger percentage of businesses fail.
You’ve also discovered what you can do to turn things around and save your failing business.
It is left to you to turn this knowledge into action and implement these steps.
While you’re at it, it’s important to keep a positive mindset and be encouraged.
If you do, the feeling of building a successful business despite the odds stacked against you can be very rewarding.
Keep thriving in business.
All the best!