Nothing demoralizes more than seeing your business trying to face liquidation. You may have tried your best to make sure that things goes well, but it seems that your best isn’t enough. The failure of your business to yield a positive result may be from factors within or outside. In any case, giving yourself a second chance to try and make things work out well may not be a bad idea. One thing that you should have in mind is that you are not the first person to face such a situation. Just like the saying goes “if at first you didn’t succeed try, try, again.” Your second effort towards improving your business may bring a great life to it.
Some of the factors that can make your Small business to fail includes;
- Administrative problems
- Poor financing
- Unwillingness to face other competitors
- Dealing with outdated/low demand products
- Inadequate market research
- Employing incompetent workers
- Incompatibility among staff
- Poor choice of business
- Setting your prices too high
- Laissez faire attitude of workers
- Improper record keeping
- Communication gap between you and your workers
One of the characteristics of successful business owners is the ability to know their mistakes and learn from them. Now that some of the reasons why your business is failing have been highlighted, its time to know the next line of action(s) to take.
What to do when your small business is failing
1. Analyze the possible reason(s) why your business is failing
There are some factors that maybe responsible for the sharp decline of your business. Take your time, pause and ponder and carry out a proper check to note the time that you started experiencing the depreciation in your business. Note that the factors can be internal or external. Extend your research to the management of your business and make your deductions.
2. Adjust or change your administrative pattern
When the exact reason why your business is failing could not be ascertained, then, you need to adjust or change your administrative pattern. If it entails you employing new workers, you can go to that extent. When you employ such new workers, strict supervision is required.
3. Check whether your products are still relevant in the Market
You may have started your business with trending products, such products may have become outdated in the Market. A good way to ascertain this is to check on your competitors whose businesses are still booming to know the particular products that they are selling at that particular time. Also check from your suppliers or producers and ask for trending or newly improved products.
4. Reacess your source of finance
This factor is popular among small business owners who borrowed money to finance or start-up up their business. The high interest being paid to banks or other financial institutions can weigh down your business which may even lead to its failure. If your current source of finance is taking much of your profit, consider changing to another form of financing.
5. Change the location of your business
Situating your business in an area where the products or goods that you are dealing with is of low demand is like intentionally paving a way for its failure. Therefore, ensure that you site your business in an area where your products is of high demand. For instance; selling children’s wears in an area comprised mainly of elderly people may lead to a low turnover and this can spell doom to your business.
6. Prioritize your spending
One of the mistakes that startups do is reckless spending to unimportant areas in their business. For instance; paying more to acquire the location for their business and leaving little for the purchase of the actual goods to be sold.
7. Try to know the best way to reinvest your profit in your business
The success or expansion of a business is dependent on the way the profit from the business is being managed. Spending your profits to unimportant projects is a red flag to your business. At every point in time, know the percentage of profit that should be ploughed back in the business and the percentage that should be kept as a fall back capital.
8. Choose an effective form of advertisement
It is not enough to open a business, advertisement of your business is necessary to enlighten the public about your business. Re-access your old form of advertisement and know whether it is reaching your target audience or not and make adjustments.
9. Improve your record keeping method
Having a proper record keeping method will help you determine fluctuations in your business. Therefore, do not neglect this aspect because it is of paramount important to the success of your business. Examine your mode of record keeping and make necessary adjustments if need be. For instance; ensure that your record keeping takes care of your daily, weekly, monthly or even yearly transactions.
10. Employ/Engage Competent Workers
Workers of various grades should be incorporated into your business. It doesn’t end in engaging them, ensure that there is a high compatibility among staff, division of labor and ensure proper supervision. There also should be a free flow on information between you and your workers.
11. Eschew laissez faire attitude in your business
Your business should be of high priority to you, therefore, take every aspect of your business serious. Avoid procrastination in the management of your business.
12. Seek the advice of business consultants and analysts
When you are unable to detect the reasons why things are not moving well in your business, you can seek the advice of business consultants or analyst. They will be able to explain properly what you may not be getting right in your business.
Don’t be in a haste to abandon your business when it is failing. Try as much as possible to solve any issue that may have given rise to this. Don’t tag your business a failure because you can still bring things to normalcy.
I hope you benefitted from our article on “what to do if your small business is failing.” We will keep on updating you with more interesting business articles.
Also Read; 10 Factors to Consider When Choosing a Small Business Location
10 Top Challenges of Small Business in Nigeria and Solutions