Five Steps to a Successful Business Turnaround
When there was still a frontier, Americans were pioneers. In the 21st century, they need to be “visioneers” -- especially when it comes to growing and maintaining successful businesses.
What do I mean by "visioneering?" It is nothing less than the embrace of constant change.
The change needs to be accepted and capitalized on because it is happening.
The recession made it painfully apparent that the Internet, smartphones and other new technologies are causing huge disruptions. The economy has changed, the world has changed and with these changes business has also changed dramatically.
The only question is whether you are going to change too in order to capitalize on it, or be left behind.
You may be a natural when it comes to adapting to chaos and change. But even those who are not can still thrive by consciously changing their daily thinking and planning to stay one step ahead.
Here are some strategies to get you started:
1. If you need to, consider a debt workout. It can be a game-changer. To be sure, defaulting and the likely ensuing foreclosure, concluding in total loss, is a recipe for chaos. But chaos is the name of the game. Sometimes you need to clear out the old vegetation before you can grow anew. Removing the debt from the business and reducing the personal guaranties to affordable losses can allow you to operate the business at given revenue, giving you the freedom to make necessary changes to succeed.
2. Track, monitor, control. How can you change if you don’t know what’s going on with your business? You must diligently track, monitor and control how your business performs and with this information make rapid and appropriate adjustments to enhance profitability. Key indicators to follow include profitability by the job or product, costs, overhead ratio and payroll ratios. Follow these measurements and then manage by the numbers.
3. Make change part of your business model. Constant reinvention is the way to win, because stability and predictability are no longer a reality. You should honor your core mission and be who you are. But you also have to adjust with the times. This comes from frequently reconsidering and questioning your business strategy, experimenting and stepping outside what you “normally” do. Specialize, find your niche, provide amazing service, be the best, the most, the go-to business. It is no longer gross revenue; it is net profit that we pursue.
4. March to the beat of a different drummer. There are all kinds of routes to consider: importing instead of manufacturing, adding services, focusing on a niche, emphasizing a competitive advantage, expanding horizontally or vertically, allowing employees to telecommute from home. The possibilities are infinite. The idea is to determine what works and does not on a daily basis and then make the adjustments required to stay profitable. Lead or get out of the way.
5. Get your marketing online. If you haven’t done it already, Internet marketing is a big change to consider as you reinvent your business. The Internet has already changed the world, so it’s time for it to change your business too. Options to consider include: a beefed-up website and online sales operation, search-engine optimization, blogging, deal-of-the-day services such as Groupon and LivingSocial, Facebook and Twitter. The Internet can help a small micro-business compete with the largest international business. Budget no longer controls the outcome, but neither does price alone. But perceived value and niche marketing will win, developed and enhanced with the community support that social networking provides. This can best be accomplished via the Internet.
Adapting to change is not a new challenge. American entrepreneurs in the past found ways to reinvent their businesses amid mind-boggling changes: the settling of the frontier, railroads, steel, antibiotics, electricity, automobiles, telephones and airplanes.
We must learn to do so again. Embrace change. Do not avoid it. It is happening anyway. So make it part of your business plan.