Business decline – practical tips to plug holes in a sinking ship

If, no matter how hard you try, customers are leaving in droves, profits are falling and staff morale has hit an all time low – your business is showing distinct symptoms of one in decline.

So, what now? First of all, don’t panic! Keep calm and come up with a strategy to turn things around.

Identify what’s at the route of your problems. This could be due to one or any combination of the following:

• Falling customer demand
• A saturated market
• Poor customer service
• Cheaper, better products offered by the competition
• More innovative products entering the market
• Poor product quality
• Inefficient operations
• Unreliable delivery
• Poor reputation or bad publicity

The list goes on…

Once you’ve worked out where the issues lie, you can make a start on sorting out the problems.

First and foremost you have to have a product or service that people want to buy. Be honest with yourself – have you really got something special?

If the answer is no, you need to make a quick decision to change direction – find another product or service, or adapt what you have to be more appealing to the market.

If there is a genuine market for your product or service, yet you’re just not making sales, then there’s something wrong with the way that your business is being run.

So look at this as a great opportunity to put things right. Here are some common issues that I’ve helped my clients address to turn their fortunes around:

Reducing staff numbers. It’s hard letting people go, but a restructure is an opportunity to re-evaluate the purpose of each role and department to see where the business is not performing or delivering an ROI. Set targets to measure against performance – it’s the most effective way of assessing where improvements can be made.

And if you need to reduce numbers, remember to motivate your remaining staff at the same time to ensure morale is not affected, and seek the advice of an HR professional if you don’t have one in the business, to ensure you comply with employment legislation.

Customer service – if you’re in a competitive market, your customers will vote with their feet if they’re not receiving high standards of customer service. Train your staff properly to ensure they’re motivated, knowledgeable and professional at all times.

Operations – Hone your operations to ensure deliveries are made on time every time, with little waiting times between orders placed and goods delivered.

Expand product portfolio – Partner with a product innovator to expand your product portfolio – the broader it is, the more resilient it is to changes in customer behaviour.

Sales strategy – Are your sales teams delivering boring power point presentations, are they selling confidently, do they know how to build relationships with their customers effectively? Do they know how to identify buying behaviours to adapt their own style? Do they have comprehensive product knowledge and are they incentivised with targets and bonuses?  Review their performance and consider further training to make them more effective.

Image – Is your company identity stuck in the past? It could be time for a re-launch of your corporate identity – to appeal to a different, more discerning market.

Marketing – What marketing channels are you using – are you still advertising in good old Yellow Pages? It’s time to embrace new online marketing opportunities – they are far more cost effective. If people can’t find you, it could be the simple reason why your sales have taken a dive.

A business in decline needs good strong management to turn it around. It needs leaders with vision and the wherewithal to inspire those in the business to devise and adopt the necessary changes.

If your business is stuck in a rut, the good news is there are still ways to make it work. Act now to avoid further decline, you can make a difference.

And if you need help planning your rescue strategy, we’re here, just call.

Coming soon – How to achieve a positive outcome when a business reaches its end

When your business matures, what next?

A business needn’t be old to be classed as ‘mature’. It could have reached a sales plateau in a short space of time.

A mature business is defined as one that has passed the stage of rapid growth, and tends to grow at the same rate as the economy. There is little room for expansion, only by stealing a greater share of the market from the competition. Price pressure exerts significant influence on the future success and profitability of the business.

Is this where your business is right now?

If so, it’s a dangerous place to be if complacency is at the heart of its management – think of old stalwarts like C&A, Woolworths and even Rover cars – disaster can strike if your competitors are acting smarter and more efficiently than you are.

So, what next?

The trick is to be ahead of the game, embrace new technology, pre-empt how customers demands change, and continue to give them what they’re looking for in terms of price, product and place. Very few businesses survive without reinvention along the way.

Think about McDonalds. They suffered a back-lash against fast food and were forced to offer fresh salads and revamp their image. And who’d have thought that Top of the Pops would ever be taken off the air! Times do change, what’s important is to make sure you’re not left behind.

Put your energies into business development to shape the future of your company and secure its continued success.

And here’s where to start

Carry out a traditional SWOT analysis – what are your threats and weaknesses – how real are they and what can you do to deal with them?

Specifically look at:

• The product lifecycle of your product or service – does it have longevity, does it need to change to meet changing customer tastes and demands?
• Pricing – can you compete on price with the competition?
• Customer service – are your customers rewarded for loyalty, or could they be easily poached?
• Competitive activity – are your competitors following an aggressive pricing or marketing strategy?
• Delivery channels – are they robust or under threat themselves?
• Market forces – is the economy threatening the ability of your customers to spend money with you?

There’s more, but I think you get the idea.

And your strengths and opportunities – can you exploit these to give your business a stronger foundation?

Specifically, look at:

• Product development – additional features/benefits
• New product launch – don’t have all your eggs in one basket
• New markets – domestic and international
• Innovative pricing, delivery, routes to market, not used by the competition
• Acquisition or merger
• Customer intelligence – what are they demanding next?
• What is the competition doing? Could you copy it or do it better?

This is all food for thought, and there’s lots more besides.

And here’s another one:

If you’ve reached the point in your business where you think it’s reached its peak and you don’t have the appetite to take it forward, then you should plan an exit strategy. Don’t be left holding a dead duck. Get out while you can, while the business still has value, and let someone else breathe new life into it.

Whatever option you choose, make sure you don’t choose complacency – it’s the death knell of business!

As ever, it helps to talk about your business with an independent person, to get an objective view of its future prospects, and what can be done to help it continue to prosper.

Just don’t leave it too late!

Coming soon – Dealing with a business in decline – a positive approach to plugging holes in a sinking ship