Turn Around Your Business in 5 Steps
As an entrepreneur you are going to face your fair share of challenges, some more dire than others. When times get tough, you are going to need to turnaround your business, develop a pivot strategy and get your company back on track. Here is how.
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For many businesses, there comes a time in the startup phase when cash is short, revenues are not growing fast enough and anxiety about the long-term sustainability of the business is growing. Your team is unsure of their own personal futures with the company and as a leader you are losing lots of sleep.
That is exactly what we faced at my online-certification startup eCornell (a subsidiary of Cornell University) about three years after launch. We had built what we thought was a great product but revenue lagged. We had not yet found our core target audience so or marketing efforts were inefficient. More importantly, we weren't focused. We were often working at cross-purposes with different ideas of the future vision. With a few relatively simple steps, we were able to find our groove and turn around our business. Like us, you too can turn the corner and become a successful and sustainable business, but you need to lead for the long term, and it starts with your people.
Here is how:
1. Be transparent. When making changes,it is imperative you are straightforward.
Unfortunately, our turnaround began with a substantial downsizing. For the rest of the team not to jump ship, they needed to trust myself and the leadership team, and that begins with knowing the hard truth. So, step one, was to establish and maintain full transparency with the remaining team -- everything from financials to cash on hand and strategy was disclosed. Lousy financials don't kill morale, it's the whispering gossip about what might be in the financials that kills morale. So, open up and invite the team to jump on board in finding revenue or streamlining expenses.
Related: How Pricing Can Power a Turnaround
2. Create a common vision. You need to make sure everyone is on the same page.
As a leader, outline how the company is going to jump start revenue and find the elusive profits. The vision has to be shared, and more importantly, all the key stakeholders need to weigh in. I engaged not only employees in contributing to the future vision of success, but reached out to key clients, early adopters and some of our key vendors. The result was everyone wanted to be part of the successful turnaround because they saw part of their vision in ours.
3. Fake it till you make it. Real sustainability takes time. But each day, week, month that you are moving closer to achieving the goal of profitability, there will be important milestones hit. We used each one to celebrate our success -- from landing a key client, beating our monthly sales target and adding our first new person to the team after a round of layoffs.
Intimate events, a small marketing campaign and even token cash bonuses send messages to the team that cash flow is better and brighter days are ahead. But don't waste these events as a one-time rush, instead connect each milestone with the broader vision and story about what you are trying to together achieve.
Related: How Tagged Made a Turnaround for Growth
4. Wrap culture around your vision. Yes, a lot gets written about the excesses of the startup office cultures. But when times get tough and people are work long days, culture plays a huge role in sustaining excitement around your vision.
For our team, that meant new cross-functional teams to enhance accountability, weekly company-wide breakfast meetings, special training sessions focused on customer service, a simple employee of the week campaign and an office re-painting party to brighten the environment and build teamwork. We created a great place to work hard, but more importantly retained 95 percent of our turnaround team at a critical time.
5. Manage for long-term momentum. Even while you are saving every penny, you need to lay the ground work for long-term momentum. Lead your company like you will always be around, and your team will believe it and invest their time and effort to make it happen.
We focused on restructuring our teams to create the right relationships and provide adequate autonomy. We created a new performance review system tied to our goals and values. We invested small amounts in training and development. And we created a new cross-functional team focused on continuous improvement. Small investments in building the team can lead to both short and long term success.