I’m going to start this article with a short story. It’s a sad story, and unfortunately, it’s something that I see more and more in established small businesses around the country.
Last week I was contacted by a local business owner that found my company from a Google search. The gentleman said that he wanted to “see what my company could do to help market his business”. In our initial phone conversation I learned that he started the company in 1993, had been quite successful in the past, but his business was now in a down cycle and he was reaching out to my company in an effort to shore up his dying business. We setup a meeting for the following day.
At 10:00am sharp I arrived for the meeting. I was greeted by the owner and was introduced to his son, who carried the title of the “guy who takes care of sales & marketing”. We sat down in a cluttered, filthy office and I began to ask questions about their business; competitors, where new client leads came from, their marketing strategy, industry differentiators and who their target market was. They proceeded to tell me that they have hundreds of competitors worldwide, are not getting new client leads, they have no marketing strategy (or marketing budget), their differentiator was “they are better” and their target market was everyone listed in a 20 year old database of industry contacts that never opted in to receive information from them – basically a scrape list of contacts from the Internet and trade show websites.
Over the next hour and a half I listened to the father and son team tell me about all the things they were doing to “get new business”. Of course their efforts were focused exclusively on cold calling the 20 year old list of unqualified leads and their desire to place an online display ad on an industry trade show website to get “logo exposure”.
During the 90 minute “therapy session” I interjected several times with obvious problems, plausible solutions, proven strategies and innovative ways for them to niche down and focus on a target. They were “all ears” and ready to go until they found out that this type of marketing comes at a cost. The owner said to me “Our business is hemorrhaging, we can’t afford that”, I responded by saying “Can you afford not to”?
Needless to say I am not working with this company and, in my professional opinion, their chances of survival are slim to none, and slim just left town. They are a classic example of a small business that was “successful in spite of themselves”. They stumbled into some level success because the market was untapped in 1993, but today the market is saturated with competitors that have diminished the value of the services they provide to a commodity based on price. This company had no long-range plan. They were not able to pivot and change direction in order to stay ahead of the industry. And as a result they have a dying business on their hands and are unable to get out of their own way in an effort to fix it.
WHAT NOT TO DO WHEN YOUR BUSINESS IS IN DECLINE
The first thing most business owners do to try and save their failing business is cut expenses, but that only slows down the inevitable. What you need to do is provide a little “life support” by breathing new life into a dying business – changing focus, create a marketing plan and taking calculated risks to jump start your rebirth.
If you are reading this article, hopefully your business is not on the verge of failure. But if your business is in decline, here’s the good news: It hasn’t died yet and there is still hope of taking control and providing the boost of energy it needs to get back on the path to success.
6 STEPS TO REVIVE A DYING BUSINESS
1. Assess your Situation
To successfully treat an ailment we need to accurately diagnose the problem. The first place to start, if your business is in decline, is to look within your organization. Self-assessment can be extremely difficult, especially in small or closely held family business, but it’s a necessary exercise. You have to be able to first identify a problem and then develop an action plan that will address and eventually get rid of the problem.
- Does the business have a direction?
- Is the business focused on the right things?
- Who are your customers?
- Where do new customers come from?
- Are your customers satisfied?
- Do customers know who you are and trust you?
- Are you customers loyal, if not, why?
- Are you focused on marketing to profitable customers vs. unprofitable ones?
- Are you offering an innovative product or service?
- Is your business competitive and profitable?
- Does the business have sufficient cash flow to sustain operations?
Honest assessment and detailed evaluation are critical strategies in any turn-around. Without them, other activities tend to be fruitless and generally yield little to no results.
2. Assess your People
You can’t turnaround a dying business without discussing the people running it. A business cannot run by itself, people are the engine that runs your business and the people you surround yourself with can make or break your business. You need to surround yourself with good people.
Diminished business opportunities can be caused leadership complacency. This happens when the business owner or senior management personnel is asleep at the wheel and get caught resting on their past accomplishments while your competitors are introducing newer, better or cheaper products and services that the market finds more attractive than yours. This change in market dominance can come at the blink of an eye. In a matter of minutes, hours, days or weeks, your company can go from the market leader to the rear of the pack. And remember, if you’re not the lead dog, the scenery never changes.
There are many questions that you need to ask;
- Are the right people running the company?
- Are the right people in the right positions?
- Are your employees committed to the company’s success?
- Are there bad apples within your business that are poisoning the entire business?
You’ll have a very difficult time turning your business around if the people who work for or with you do not share common goals. You will need to make some tough decisions – you need to cut ties with the wrong people fast, and then identify the ones that can assist you in resurrecting your dying business in the shortest possible time.
3. Develop your Plan
OK, so you have assessed your situation and your people, now is the time to develop the plan to move your business forward. Assessment reveals what is wrong with your business and your plan is what will put your business back on the right track. You may need to go back to the basics to set the new direction for your company, after all this is going to be the game plan for your turnaround.
When a business is in decline, the problem is often caused by not having a clear direction or deviating from a set plan or path.
4. Innovate – Pivot and Change Direction
In this ever changing global marketplace, your business won’t be able to sustain itself if your products and services don’t remain at the forefront of your industry. Are you offering innovative products or services? Could your business create substantial market differentiators by better utilizing technology to create better products, reduce costs, improve your competitive advantage and enhance customer loyalty and retention?
Lack of innovation is one of the critical warning signs of a failing business. It’s pretty difficult for a business to remain relevant if it fails to introduce new products and services or update existing ones. People change, needs change, markets change, technology changes and your business must change too. If you refuse to change and do not innovate and update your products and services, your business will be perfectly positioned for failure.
5. Define Your Niche and Focus
You can’t be all things to all people, nor should you try to be. When a business owner tries to do too many different things, it can cause the business to spread itself too thin and instead of being known as the expert in your field, you end up becoming the “jack of all trades, master of none.” This is rarely good in business.
Lack of focus can mean that your target niche is too broad. When your target market is “everybody”, your actual target market becomes “nobody”. Niching down your product or service to the “lowest common denominator” is very important so that you can understand who your target market really is and you can focus your marketing effort on that specific group.
6. Rethink your Marketing Strategy
Now that you have assessed your situation, evaluated your people, defined your strategy and focused your niche, it’s time to create a new marketing strategy. Forget what you were doing before that got you into the position you are in today, instead you need to come up with a marketing strategy that will prove to be effective long-term.
Do you have a professional website that is mobile-responsive? Is your website optimized and appearing in searches when prospective clients are trying to find the product or service you provide? Are you making the most of social media? Do you have an online lead generation strategy that is providing you with a steady flow of new client leads?
A new marketing plan using the Internet can reinvigorate your business and provide a solid return on investment. It should be obvious that what you were doing before clearly wasn’t working, so a fresh marketing plan that employs new strategies like responsive website design, search engine optimization, inbound marketing and content syndication just might get your business back on the right track.
DON’T JUST SIT THERE…TAKE ACTION!
Many small business owners believe that during a time of crisis, when their business is hemorrhaging money, their best option is to play it safe. Nothing could be further from the truth. When you know your business is going down for the count, you need to be proactive, not reactive. You can’t sit back and wait for more bad things to happen before you take direct action. Taking bold action and employing proven marketing strategies and tactics is often the best course of action to save a dying business.