Almost half of new small businesses in the U.S. do not survive past their fifth year. However, such businesses do not fail overnight. Instead, when you take a closer look, you’ll see there are a couple of key signs that indicate to a dying business, months before it even happens.
Most business owners will try to save their businesses by cutting down on expenses, but this will only slow down the inevitable. What you should be doing is breathe new life into your dying company. Here are a few ideas that will help turn around your failing business before it’s too late.
1. Change Direction
This sounds easier than it actually is and may mean different things to different businesses. For some business owners, this means changing the business model, for others, this means taking a totally different vertical or even changing the target customer. You may also sell a completely different product – this usually happens when business owners did not validate their business ideas before launching.
You need to carry out a close analysis of what is working and what is not, and consider making those drastic changes. For instance, Wrigley’s Gum did not start out selling gum. Instead, the company started out selling soap, then baking soda and eventually chewing gum – changes that were caused by customer demand.
In most cases, rebranding is not the first thing that business owners consider once sales start plummeting. However, when a business and its products are not properly positioned on the market, rebranding becomes a necessary step to solving the problem. Rebranding will successfully jump-start your enterprise, but it will not be as easy as changing the logo; it’s a total overhaul that will have a major impact on how your business positions itself in the market.
3. Focus on a Single Niche
When businesses try doing too many things at the same time, it may cause their operations to stretch themselves too thin. On the other hand, a lack of focus may mean that your target niche is too wide – if your target customer is everybody, you have nobody! This is why you should have a specific target customer in mind.
Take the example of law, which is a field covering all types of niches, but by focusing on a single niche, like Irvine CA asset protection law firm, law firms have a better chance of finding specific clients. Another example, when Steve Jobs reduced the number of projects Apple was developing by cutting their products from 350 to just 10, including the Newton project that had guzzled $100 million. By 1998, Apple was focusing on the personal computer space and turned a profit of $309 million.
4. Design a New Marketing Plan
Are you maximally utilizing social media? Is the business’ website optimized for mobiles and appearing in top search results? Maybe, you overestimated the size of your market or your market research was poorly executed or skewed.
Creating a new marketing plan will help reinvigorate your company by offering you a blank slate to work on. What you were previously doing is obviously not working, so a fresh plan, trying new approaches, might be what your business requires to get out of a rut.
5. Take on More Risks
Many business owners prefer playing it safe in times of crisis. This could not be further from the truth. The best course of action to save your dying business is to take bold risks!
Think about it, you have less to lose when your business is about to shut its doors. You would be better off trying innovative things rather than being conservative at this stage.