Once you have been running your business for a while, your original business model may no longer work. You may have a good brand, long time customers and word of mouth referrals, but your business is no longer growing. Your revenues are flat. You might be able to pay all the bills from the business and even collect a paycheck for yourself, but there is no profit. The recession started in 2008. If you were fortunate enough to stay in business since that time, the one thing you know for sure is that the nature of business has changed. It’s harder than ever to get credit, even with standing contracts and good receivables, because more than likely, you are still carrying debt from the bad years. Are you working part-time to support your business? Are you using your savings/retirement or borrowing from family to keep the business a float? If your business is struggling, what do you do now?
Do you keep doing the same thing hoping that your business will come back to what it was in its heyday? Should you try to figure out how to get new customers? Or do you try to develop a new business model and perhaps a new line of business? Whenever I come across a small business with this dilemma, I always revert back to something my father told me as a little girl, “the world is still waiting on a better mousetrap, and if you create one the world will beat a path to your door”. So in the immortal words of the late John Emerson, if your business is struggling, it’s time to figure out if you can build a better mousetrap.
Look at your brand. How much brand equity do you have? What does your brand mean in the marketplace? Is your brand still relevant to your target customer? Is it time to change your name or logo? Could you reinvent or reposition your brand with an entirely new customer base?
Look at what you sell. From consumers to purchasing managers for Fortune 500 companies, the recession has made everyone price sensitive. Are your customers still buying what you sell? Has there been an increase or decrease in demand for your services or products? How are they buying — online, reverse auctions or retail? How is the competition? Are you losing a lot of business over price? Are there any outside factors that affect your customer’s ability or need to buy your product? Do you need a new product line to stay competitive?
Look at your capacity. Do you have any capacity in your business? If you got a big order or large contract tomorrow could you handle the increase from a staffing, cash flow or productivity standpoint? How fast could you ramp up?
Look at your marketing efforts. How are you attracting new customers? Is it all word of mouth referrals? How are you communicating with your existing customers? Are you using social media at all? Are you measuring your marketing efforts? Marketing is the engine that drives sales in a small business, if your business is flat, it might be time to update your marketing tactics.
I realize that these are hard questions to answer. If you are not growing and not profitable—something must change quickly. It’s hard to imagine that your business is no longer relevant to the marketplace. Be honest with yourself about where your business is really going. Give yourself a timeline for how long you are going chase your current business model. Make the hard decisions now, so that you will still have a business in the years to come.
Have you had to reinvent your small business? How did you do it?
Image “Overcome Loss” courtesy of Danilo Rizzuti / FreeDigitalPhotos.net
Melinda F. Emerson, known to many as SmallBizLady is America’s #1 small business expert. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing to fulfill her mission to end small business failure. She writes a weekly column on social media for The New York Times. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com. Melinda is also the bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works and the ebook: How To Become A Social Media Ninja; 101 Ways to Dominate Your Competition Online.