From time-to-time things may not go the way you need them to in your small business. When that happens, you need to take a deep breath and figure out what you are going to do. You can always seek the advice of mentors, but ultimately you need to do a gut check with yourself.
Here are 5 things to consider when your business is not going well:
- Don’t be an ostrich: A major failing of many small business owners is in not taking their head out of the sand to give their business an overall strategic look. It is vital that you step back and research — look for trade association analysis, economic marks, and consume as much information as is published about your information. But you can’t rely solely on what is published — you need to venture into the real world to ensure the data you’re finding is valid. Networking is critical — go to tradeshows, join your local chamber of commerce, and talk to other business owners in your industry. Talk to different sources to make sure the information you’re receiving is consistent. You can spot trends by speaking to manufacturers and vendors that service your industry — they’re the ones that see what’s coming down the line.
- Prepare for battle: Take a coldblooded look at where your market is in terms of how you think it will uptick. Then, look outside of your market to see how the larger picture as the buying habits of your target customer may have changed. Use what you learn to formulate a 6-month and a 12-month plan of action, which should include milestone markers that will be used for you to assess your plan as you execute it. But, don’t panic if it takes a little longer than you expected it might— there are frequent delays and changes in the market, and you have to give your plan time, and keep the faith. It’s important to balance belief in what you’re doing with outside data that confirms you’re on the right bath — large companies have teams of people that do this full-time, but for small business, it falls on the business owner to do so.
- Call in backup: Every business owner needs a group of people that they truly trust, but whom aren’t involved in the day-to-day operations of the business. Business owners should seek to create an advisory group of individuals that understand your sector, but aren’t in the trenches with you, to bounce ideas off of and then triangulate accordingly. Small biz owners tend to be isolated, and forget the value of having outside perspective. Large companies have investors and boards of directors, and meet quarterly to get that perspective, which gives them a leg up over small businesses that don’t take the time to connect for insights.
- Low, slow, or no cash flow: In order to sustain delays in the market, smart business owners will build in a financial cushion. It is vital that business owners go beyond living week-to-week or month-to-month — you need to think about your plan and how you’re spending your cash. What if several customers are suddenly unable to pay in the set window of time? If multiple accounts receivables are coming in slow, instead of waiting for crunch time, prepare ahead — can you tap a line of credit? Contact your vendors to extend payment terms? Order stock/supplies less frequently? Take a close look and do a cash flow projection to make sure you’re prepared to weather the worst.
- The laws of (funding) attraction: Investors are largely still on the sidelines and, unless your company has an Internet play (retail or service), they’re going to evaluate you based on traditional models of revenue and profitability. If you go out for funding, you must be able to allocate time away from your business — and it takes a lot of time, and you have to put together a written plan with backup on financials. For small businesses right now, banks are still very tight. Unless you have perfect credit and a stellar background, the bank’s return to traditional lending guidelines means that your best bet is to go after small business loans backed by the SBA (federal government). If traditional lending sources are not an option for your business, don’t give up hope — there are more large groups of angel investors than ever before, and many businesses survive by reaching out to friends and family.
Quincy Yu, has spent her 30+ year career consulting for big and small businesses across a variety of industries, and currently she serves as President of SeaYu Enterprises, makers of Clean+Green natural pet stain and odor removers.
WoW..this is so very true and helpful..thank you for posting!! And I will act on it…
I appreciate this info. It came right on time! As I read I realized that some of these practices were already in place, but I wasn’t as aware of the value of them. The trusted group of people for support for example…I have those I go to for counsel and ideas and sometimes just confidence, but now their value is recognized and I can use that relationship more effectively.
This is one of the best posts I’ve seen on this subject in a long time. I will be sharing it with my clients!
Thank you for your comments. I had never thought to see or reach out to other Christian business people on the net that is until now when I have been earnestly seeking God’s will for our manufacturing business. We are at a stage where personally we would like to retire and thus would love to consider selling the business which until the recent downturn had been quite a successful business. As we started the business some 10+ years ago as a leading from God, we feel very strongly that it is His business and thus we need to seek His will. But we are weak and have not been able to discern his leadership for the past couple of years, which has seen the business decline even further whereas we are now losing $1,000 a week to keep it going. The machinery and stuff is valuable and we can not just shut the door. How do we determine what God’s will is? How long do we pray for answers we can not see?
nice piece….thanks